A U.S. proposal would allow AI chip sales to China in exchange for a 15% revenue cut, potentially altering export controls that protect U.S. strategic technology advantages. Treasury officials are framing the proposal as a model for other firms. Nvidia's CFO said the U.S. has expressed an "expectation" of a 15% share of H20 revenue but has not codified that in regulation. Nvidia warned that any revenue percentage demand could prompt litigation, raise costs, damage competitiveness, and benefit rivals. The company excluded potential H20 China sales from guidance, cited geopolitical issues, and flagged regulatory scrutiny in its 10-Q.
It may take some time for Nvidia to see an upside from U.S. President Donald Trump's unprecedented offer to allow AI chip sales to China in exchange for a 15% cut. The deal could shake up an export control regime designed to maintain the U.S.'s edge in strategic technologies. Officials like Treasury Secretary Scott Bessent are already positioning the arrangement as a model for other companies hoping to sell sensitive technology to China.
But during Nvidia's earnings call on Wednesday, CFO Colette Kress noted that while the U.S. government has expressed an "expectation" that it'd get 15% of Nvidia's H20 revenue, it "has not published a regulation codifying such requirement." In a later exchange filing, Nvidia warned that "any request for a percentage of the revenue by the USG may subject us to litigation, increase our costs, and harm our competitive position and benefit competitors that are not subject to such arrangements."
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