Trump Announces NVIDIA/AMD Agreement on China Revenue; Labels H20 AI Chip as ‘Obsolete’ While Advocating for Less-Powerful Blackwell AI GPUs for Future Use in China

President Trump has confirmed that the United States has reached an agreement with GPU manufacturers to export their chips to China. In his statements, he noted that NVIDIA is currently marketing an outdated chip in the Chinese market.

Details of the Negotiation Between the US and NVIDIA

Reports indicate that the Trump administration has struck a unique deal with NVIDIA and AMD, wherein these companies will remit 15% of their revenue generated from China to the US government. This agreement marks a notable shift in how the government is interacting with corporate entities regarding international trade. President Trump emphasized his original aim was a 20% share, but NVIDIA’s CEO Jensen Huang was able to negotiate it down to 15%.

I wanted 20%, but Jensen negotiated me down to 15%.We are only doing this for the H20 chips. We may do this for Blackwell, but it would be a lesser version of the most powerful Blackwell chip.

In addition, President Trump hinted at the possibility of releasing new AI GPUs to China but mentioned that these chips would be downgraded to avoid providing Chinese AI developers with a competitive edge. This implies a firm policy from the US administration to restrict access to high-performance AI chips, pushing NVIDIA to adapt by offering lower-grade alternatives. Speculations surrounding NVIDIA’s plans to create a GDDR7-based AI chip for the Chinese market now seem plausible; however, developments in this area will warrant close observation.

NVIDIA's H20 AI Accelerators Might Face The Next US Ban

President Trump characterized NVIDIA’s H20 chips as ‘obsolete, ’ indicating a significant performance gap when compared with the newer offerings available in the US market. This assertion holds merit, considering the H20 chips have been available in China for several years and fall short of the capabilities provided by newer models like the Blackwell. Although demand exists for the H20 chips in China, it may change as the country’s need for advanced computing power escalates in the coming year.

Moving forward, the evolving dynamics between NVIDIA and China will be crucial to watch, particularly regarding the potential introduction of improved products to that market.

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