US Deals with Nvidia, AMD: A Global AI Standard?

US deals with Nvidia and AMD may impact the development of artificial intelligence globally, with potential for a dominant standard or different forks. The US is allowing some AI chips to be sold to China, raising questions about the future of AI technology. Bloomberg's Lei Qiu, CIO for Thematic Innovation Equities at AllianceBernstein, discusses the implications with Caroline Hyde and Ed Ludlow on "Bloomberg Tech."

The United States has struck an unprecedented deal with Nvidia and AMD, allowing the export of certain AI chips to China in exchange for a 15% revenue-sharing agreement with the US government. This arrangement, reported by CNN [1], has significant implications for the global development of artificial intelligence (AI) technology.

The agreement, brokered by President Donald Trump, enables Nvidia to export its H20 chips and AMD to sell its MI308 chips in China. In return, the companies must pay 15% of their revenues from these sales to the US government. This deal is part of a broader effort to maintain US dominance in AI while maintaining trade ties with China.

The deal has sparked both investor concern and curiosity. While Nvidia's and AMD's stocks have experienced significant volatility, both have seen notable gains in 2025. Nvidia's stock (NVDA) is up 31%, while AMD's stock (AMD) has increased by 39% [2]. The revenue-sharing model has raised constitutional concerns among legal scholars and industry experts, who question the legality of taxing exports.

The potential impact of this deal on global AI development is substantial. China's demand for advanced AI chips is high, and the ability to sell these chips could generate billions of dollars for the US government. However, the deal also raises security concerns for China. A social media account linked to Chinese state media has expressed concerns about backdoors in Nvidia's H20 chips [1].

Moreover, the deal comes at a time of heightened trade tensions between the US and China. The trade truce that reduced triple-digit tariffs is set to expire on August 12, but officials have signaled a possible extension following recent talks in Sweden [1]. The deal with Nvidia and AMD is part of a larger negotiation that includes the potential relaxation of export controls on high-bandwidth memory (HBM) chips [1].

The future of AI technology is uncertain. The US is allowing some AI chips to be sold to China, raising questions about the potential for a dominant standard or different forks of AI technology. The deal could accelerate China's AI ambitions, but it also underscores the US's commitment to maintaining its technological edge.

References:
[1] CNN. (2025, August 11). How to get from A to B in a city where not all streets have names. Retrieved from https://www.cnn.com/2025/08/11/china/us-china-trade-nvidia-chips-intl-hnk
[2] AInvest. (2025, August 11). Nvidia and AMD stocks volatile due to China AI chip deal. Retrieved from https://www.ainvest.com/news/nvidia-amd-stocks-volatile-china-ai-chip-deal-2508/