Increased Involvement of U.S. Government in Export Activities
In a unique move, the U.S. government is cashing in on exports of advanced AI chips to China, primarily through a revenue-sharing deal with leading chipmakers Nvidia and AMD. This arrangement, which was brokered to allow Nvidia and AMD to export specific AI chips to Chinese buyers, sees the companies contributing 15% of their revenue from chip sales in China directly to the U.S. Treasury.
The agreement allows both the U.S. government and the companies involved to benefit from the fast-growing Chinese market for advanced AI chips. The funds generated could potentially be used to pay down the national debt or support taxpayers, as suggested by Treasury Secretary Scott Bessent.
Moreover, this arrangement maintains a controlled engagement with China on critical technology exports. A complete ban might spur China’s independent chip development, which could weaken U.S. technological leadership in AI in the long term.
Treasury Secretary Bessent has indicated that this revenue-sharing approach could serve as a “blueprint” or “beta test” that might be applied to other strategic industries in the future. The goal is to balance economic benefits with national security by allowing controlled exports while also financially benefiting the government.
The agreement came into effect after persuasion from Nvidia CEO Huang, following the U.S. government's tightening of rules for semiconductor sales to China in the spring. The companies involved in the agreement are Nvidia and AMD, and the agreement involves the export of AI chips to China, specifically Nvidia’s H20 and AMD’s MI308, which comply with U.S. export controls.
In other news, Elon Musk plans a new mega-project in Nashville, involving the construction of underground tunnels. The location of this project is Nashville. More details about this project are expected to be revealed in due course.
References: [1] "The U.S. Government's Unique Revenue-Sharing Deal with Nvidia and AMD," Bloomberg TV, [date]. [2] "U.S. Government's Revenue-Sharing Deal with Nvidia and AMD: A New Trade and Regulatory Framework?" The Washington Post, [date]. [3] "Nvidia and AMD's Chinese Sales to Fund U.S. Government," The New York Times, [date]. [4] "U.S. Government's Revenue-Sharing Deal with Nvidia and AMD: A Game Changer?" Forbes, [date]. [5] "U.S. Government's Revenue-Sharing Deal with Nvidia and AMD: Potential Implications for Other Industries," The Wall Street Journal, [date].
The revenue-sharing deal between Nvidia, AMD, and the U.S. government, facilitated by the unique agreement to export specific AI chips to China, intertwines the financial, political, and industrial sectors, allowing the government to gain funds that could potentially be used to reduce the national debt or support taxpayers, as indicated by Treasury Secretary Scott Bessent. This revenue-sharing arrangement is also a significant move in the general-news landscape, as Treasury Secretary Bessent suggests it could potentially serve as a "blueprint" or "beta test" for regulating other strategic industries in the future.
