Trump Cashes In After Digging Buddy Out of $5.5 Billion Hole
AI giant Nvidia has struck a deal to pay the White House 15 percent of its profits from computer chip sales to China after the president went “TACO” on export restrictions last month.
Photo Illustration by Eric Faison/The Daily Beast/Getty Images
The White House will rake in billions in fees from a company owned by a pal of President Donald Trump after the president walked back trade restrictions that limited the firm’s profits.
Nvidia told the Financial Times on Monday that the company, along with fellow AI-chip manufacturer AMD, will now pay 15 percent levies on computer chip sales to China in exchange for the Trump administration granting them licenses to export to the country.
Last month, Nvidia CEO Jensen Huang, whom Trump has described as “my friend,” secured a sit-down where he begged the president to reverse a Commerce Department policy, implemented in April under the White House’s sweeping Liberation Day tariffs, restricting sales of the company’s advanced H20 chip to China.
Nvidia CEO Jensen Huang has insisted sales of the company's H20 computer chip to China are essential for securing American AI-dominance.
Andrew Harnik/Getty Images
At that meeting, Huang sought to persuade Trump that the path to U.S. AI-dominance lies in selling more of those chips, used in bleeding-edge data centers that train AI models and operate AI applications, to a hostile country the Nvidia CEO says is home to more than half of the world’s leading AI researchers.
It worked. Less than a week later, Nvidia announced it had received assurances that the Trump administration would grant the desired export licenses and that it hoped to “start deliveries soon” after suffering more than $5.5 billion in lost sales due to the restrictions.
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“It’s so innovative and dynamic here in China that it’s really important that American companies are able to compete and serve the market here,” Huang said in an interview with China’s state-run CGTN TV network. Commerce Secretary Howard Lutnick, meanwhile, previously told CNBC that China would only be getting Nvidia’s “fourth best” chip.
Commerce Secretary Howard Lutnick (left) has insisted the H20 chip is only Nvidia's "fourth best."
Andrew Harnik/Getty Images
Security experts were less enthused.
“Bejing must be gloating to see Washington turn export licenses into revenue streams,” Liza Tobin, a China hawk who formerly served on Trump’s first National Security Council, told the FT. “What’s next—letting Lockheed Martin sell F-35s to China for a 15 per cent commission?”
The Trump administration has not said how it plans to spend the proceeds. The deal with Nvidia and AMD is the latest about-face in Trump’s trade war. His repeated flip-flops on trade threats against foreign adversaries has earned him the moniker TACO (Trump Always Chickens Out) among Wall Street stockbrokers.
The Daily Beast has reached out to the White House, Commerce Department, and AMD for comment.
A spokesperson for Nvidia said that, “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” adding that “America’s AI tech stack can be the world’s standard if we race.”
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