Major tech companies to pay Trump administration for export licences to China

Two major US microchip makers have agreed to pay the Trump administration a portion of sales in return for export licences to send chips to China, according to reports.

The world's most valuable company, Nvidia, and Advanced Micro Devices (AMD) will give 15% of Chinese sales of two AI-powering microchips to the US government. Such an agreement is said to be unprecedented, according to reporting in the Financial Times.

Money blog: Sainsbury's defends 25% meal deal hike The companies are reported by the paper to have been issued licences to export the semiconductors to the world's second largest economy after a change of course by the Trump government in June. Semiconductors are found in nearly all electronic technology and are vital to powering the modern world.

Previously export of ones, such as the H20 and MI308 produced by Nvidia and AMD respectively, had been banned under US national security grounds. But successful lobbying by Nvidia's chief executive Jensen Huang meant Trump allowed for resumed sales in China.

Having China reliant on US technology, rather than needing to develop its own, was seen to be better for America by the administration. Nvidia's H20 chip was designed with the Biden administration's export crackdown on advanced artificial intelligence (AI) powering chips in mind.

In April, President Trump's government said it would ban export of the H20. The companies have been contacted for comment.

Nvidia told other news outlets, "We follow rules the US government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership.".