Semiconductors costs Nvidia, AMD great amounts

(MENAFN) US semiconductor leaders Nvidia and Advanced Micro Devices (AMD) will be required to hand over 15 percent of their revenue from artificial intelligence (AI) chip sales to China under new rules, according to media reports.

The chips at the center of the issue are Nvidia’s H20 and AMD’s MI308, both designed as less powerful alternatives to their flagship models specifically for the Chinese market. Despite being scaled down, they remain crucial as AI “accelerators,” enabling high-performance computing and advanced AI applications, said Dylan Loh, a professor at Singapore’s Nanyang Technological University.

Washington had previously restricted exports of such chips on national security grounds, with Nvidia estimating potential losses of $5.5 billion and AMD projecting up to $800 million in damages.

US officials recently reversed course, allowing Nvidia to sell its H20 chips to China, a move that sparked debate given the potential military applications of such technology. Loh noted the dual-use nature of the chips, while Chong Ja Ian of the National University of Singapore said they could even be employed by US forces in a conflict scenario.

The shift came after concerns that Chinese tech giant Huawei was advancing quickly and could threaten Nvidia’s dominance. US President Donald Trump’s AI advisor, David Sacks, defended the move, describing the H20 as an outdated product far from cutting-edge.

Still, experts say the arrangement is “unprecedented,” highlighting the steep price of maintaining market access amid escalating US-China competition. Obstacles for Nvidia and AMD may yet emerge as the tech rivalry deepens.

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