Andrew here. President Trump has made deals with Nvidia and AMD to take 15 percent of their A.I. chip sales to China. It is a surprising new twist in the narrative around national security and tariffs. Depending on your perspective, this is a new form of industrial policy or some form of extortion. What do you think? Let us know.
Also on Monday: I discuss on “The Daily” why the markets have held up better than expected as higher tariffs go into effect — and how C.E.O.s are reacting.
The Trump chip commission
As President Trump has waged trade wars around the globe, he has said that his goal is to establish American superiority in international commerce and in key areas like artificial intelligence.
But news that his administration struck a deal in which Nvidia and Advanced Micro Devices agreed to pay the U.S. 15 percent of what they make in selling A.I. chips to China in exchange for export licenses raises key questions. What is Trump’s actual end goal when it comes to trade? And is his approach putting Washington’s lead in A.I. — and national security — at risk?
The TL;DR: Nvidia’s C.E.O., Jensen Huang, met with Trump at the White House on Wednesday and agreed to fork over a portion of sales of H20 processors; the Commerce Department granted the licenses two days later, The Times reports. (AMD reached a similar agreement for its MI308 chip.)
Huang had called for Nvidia to be allowed to do more business with China, warning that Chinese rivals like Huawei would otherwise take market share.
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