Published on: 2025-08-11

Intelligence Report: Nvidia and AMD to Give US Cut of Revenue to Sell Chips to China – PetaPixel

1. BLUF (Bottom Line Up Front)

The strategic judgment is that Nvidia and AMD’s agreement to share revenue with the US government to sell chips to China represents a significant shift in US export control policy. This move could set a precedent for future tech exports, potentially undermining national security concerns in favor of economic gains. Confidence level: Moderate. Recommended action: Closely monitor the implementation and international reactions to this agreement to assess its impact on US-China relations and global tech markets.

2. Competing Hypotheses

Hypothesis 1: The revenue-sharing agreement is primarily an economic strategy to boost US revenue while allowing Nvidia and AMD to access the lucrative Chinese market. This hypothesis suggests that economic considerations are being prioritized over national security concerns.

Hypothesis 2: The agreement is a strategic maneuver to maintain control over critical technology exports while superficially addressing national security concerns. This hypothesis implies that the US government is using the agreement as a tool to exert influence over Nvidia and AMD’s operations in China.

3. Key Assumptions and Red Flags

Assumptions:
– The US government believes the economic benefits outweigh potential national security risks.
– Nvidia and AMD are willing to comply with government demands to maintain market access.

Red Flags:
– Lack of clarity on how national security concerns are being addressed.
– Potential for backlash from allies who may view this as compromising security for economic gain.
– Absence of detailed terms of the agreement, raising questions about enforcement and compliance.

4. Implications and Strategic Risks

The agreement could lead to a shift in global tech export policies, with other countries potentially adopting similar strategies. This may weaken international export control regimes and increase the risk of sensitive technologies falling into adversarial hands. Economically, it could boost Nvidia and AMD’s market positions but may also provoke tensions with allies concerned about security implications.

5. Recommendations and Outlook

• Monitor the implementation of the agreement and its impact on US-China relations.
• Engage with allies to address concerns and reinforce export control frameworks.
• Scenario Projections:
  • Best Case: The agreement strengthens US economic interests without compromising security.
  • Worst Case: The agreement leads to a breakdown in international export control cooperation.
  • Most Likely: The agreement results in short-term economic gains but raises long-term security concerns.

6. Key Individuals and Entities

– Nvidia
– AMD
– Donald Trump
– Lip Bu Tan
– Jacob Feldgoise

7. Thematic Tags

national security threats, cybersecurity, economic strategy, US-China relations, tech exports