Biden Admin Shifts AI Chip Policy to Encourage Global Adoption

Former CHIPS Program official Dan Kim notes a shift in the US administration's approach to AI chip diffusion, with President Trump now seeking to have the rest of the world build on the US AI stack. Kim also discusses Nvidia and AMD's 15% revenue sharing agreement and the lack of relaxation in HBM sales.

Title: The Evolving US Approach to AI Chip Diffusion: Nvidia and AMD's Revenue-Sharing Deal

The US administration's approach to AI chip diffusion has shifted under President Trump, who is now seeking to have the rest of the world build on the US AI stack. This new strategy is evident in the recent 15% revenue-sharing agreement between Nvidia and AMD with the US government, allowing these semiconductor giants to sell AI chips to China while ceding 15% of their China-derived revenues to the U.S. Treasury [1].

The agreement, which aims to prevent China from fully decoupling from U.S. technology, has sparked debate among investors, policymakers, and technologists. While it provides Nvidia and AMD with access to a market projected to grow to $100 billion in AI, it also risks accelerating domestic chip development in China in response to the restrictions [2].

Former CHIPS Program official Dan Kim notes that the deal reflects a broader strategy to maintain US dominance in artificial intelligence. However, the lack of relaxation in high-bandwidth memory (HBM) sales remains a significant concern, as China has expressed interest in easing export controls on these critical components for AI chips [1].

The deal's sustainability is threatened by legal uncertainties and geopolitical tensions. Constitutional challenges and ongoing trade negotiations between the US and China could disrupt the agreement, leading to market volatility and potentially accelerating China's push for indigenous AI chip development [2].

Investors face a high-stakes gamble at the intersection of geopolitics, technological competition, and corporate strategy. The revenue-sharing agreement is a calculated move in the AI arms race, but its long-term impact remains uncertain.

References:
1. [1] https://www.cnn.com/2025/08/11/china/us-china-trade-nvidia-chips-intl-hnk
2. [2] https://www.ainvest.com/news/navigating-ai-crossroads-nvidia-amd-15-revenue-sharing-deal-future-china-tech-dynamics-2508/