Increased potencial for expanded US government role in export activities
The US government has entered into a groundbreaking agreement with chip giants Nvidia and AMD, with potential implications for other industries involved in strategic or high-tech exports. This agreement, which could serve as a template for the future, involves paying a fee to the US government for licenses to export certain technologies to China.
The agreement came about after persuasion by Nvidia CEO Huang, following the tightening of semiconductor sales rules by the Trump administration in the spring. The unique arrangement is currently unprecedented, as the US government is set to receive a share of sales from Nvidia's H20 systems and AI chips from both Nvidia and AMD destined for China. Initially, President Donald Trump demanded a 20% share from Nvidia CEO Jensen Huang, but the agreement now stands at a 15% share.
The agreement has the potential to be expanded over time and to other industries, as suggested by US Treasury Secretary Scott Bessent in a discussion on US broadcaster Bloomberg TV. This implies that similar arrangements could be extended to sectors beyond semiconductors, such as rare earth materials and advanced materials, other high-tech and AI-related technology sectors, defense and aerospace industries, and telecommunications and networking equipment.
The agreement's focus on semiconductors and rare earths as leverage points in US-China trade negotiations suggests that rare earth export controls could adopt similar policies. Given Nvidia and AMD’s chips are AI-focused, other advanced AI hardware or software providers might face analogous export restrictions with revenue-sharing clauses.
The arrangement marks a significant shift in US export policy, blurring lines between regulatory control and economic arrangements. Some experts warn this could lead to similar measures in other strategic industries, reshaping how the US government manages access to foreign markets under export control frameworks. Critics have raised concerns about the potential precedent of "pay-to-export" policies, which could fundamentally alter export control implementations for strategic technology goods.
In summary, this US-China revenue-sharing export deal, initially focused on the semiconductor sector (Nvidia and AMD specifically), could extend to industries related to rare earths, advanced AI technologies, defense, aerospace, and telecommunications, fundamentally altering export control implementations for strategic technology goods. The agreement's potential expansion over time and to other industries could have far-reaching implications for the global tech industry.
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