Trump Considers Nvidia's Downgraded Chip Sales to China: A Deal in the Works?

Trump Considers Nvidia's Downgraded Chip Sales to China

President Donald Trump has signaled he's open to allowing Nvidia to sell a downgraded version of its advanced Blackwell system to China.

Potential Deal with Nvidia

Trump suggested he would meet with Nvidia CEO Jensen Huang to discuss the Blackwell system, Nvidia's current most advanced system designed for AI. Trump indicated a possible deal involving a performance reduction for the chip.

Export Licenses and Revenue Sharing

This development follows agreements where Nvidia and AMD agreed to pay the U.S. government 15% of revenue from chip sales to China in exchange for export licenses. Trump initially sought a 20% cut.

Strategic Implications

According to Paul Triolo, this strategy could lead China to become dependent on substandard technology. Nvidia's Huang has cautioned that restricting access to U.S. chips could empower domestic competitors like Huawei.

The Huawei Factor

Currently, Chinese companies are using stockpiles of previously acquired Nvidia GPUs while anticipating Huawei's Ascend series processors to become a competitive alternative.