Trump plans to allow NVIDIA and AMD to sell downgraded AI chips to China, involving a 15% revenue share

According to the Zhitong Finance APP, U.S. President Donald Trump stated on Monday, August 12, local time, that he might allow NVIDIA (NVDA.US) to export a downgraded version of its most advanced artificial intelligence chips to China. In a media interview, Trump revealed that he would consider approving the relevant export agreement if the performance of the company's new Blackwell processor is adjusted (essentially downgraded). He specifically mentioned that the performance of this chip could be reduced by 30% to 50%. In a subsequent briefing, Trump responded to earlier reports about an export licensing agreement reached with NVIDIA and AMD (AMD.US). It is said that this agreement would allow the export of previously banned chips to China, in exchange for which the U.S. government would receive 15% of the sales revenue from the relevant products. Although some analysts in Washington and hardliners on China have warned that providing advanced U.S. chips to China could fuel its military and technological ambitions, Trump defended the agreement, stating that he initially requested a 20% share "for China," but later accepted Jensen Huang's proposed countermeasure of 15%. He emphasized that the agreement "only applies to the H20 chip" and stated that this model "is outdated, and China has already mastered similar products through various means." Trump further pointed out that NVIDIA CEO Jensen Huang has discussed the issue of export restrictions to China with him multiple times in person, "and he will come to talk to me about this matter again," revealing that the negotiations will involve "significant adjustments to the non-upgraded version chips." According to public information, Huang has previously communicated with Trump's team multiple times regarding export control issues. Bernstein analysts have a negative view on the reports that NVIDIA and AMD need to hand over 15% of their AI chip sales revenue to the U.S. government in exchange for export licenses, believing that this agreement sets a bad precedent, but they also acknowledge that "getting 85% is better than getting nothing." Reports indicate that the U.S. Department of Commerce has initiated the relevant approval process, but the specific use of funds has not yet been clarified. The deeper motivation behind this policy adjustment lies in the U.S. anxiety over the rare earth supply chain. Due to the heavy reliance of U.S. domestic rare earth production and processing on China, military giants like Lockheed Martin face the risk of fighter jet production halts due to rare earth shortages, directly prompting the Trump administration to restart technology export negotiations. It is worth noting that this policy relaxation does not touch on export controls for equipment below 14nm process and advanced AI chips