{"id":904,"date":"2025-08-11T15:18:05","date_gmt":"2025-08-11T15:18:05","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=904"},"modified":"2025-08-11T15:18:05","modified_gmt":"2025-08-11T15:18:05","slug":"trumps-export-tariff-is-worth-it-for-nvidia","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=904","title":{"rendered":"Trump\u2019s export tariff is worth it for Nvidia"},"content":{"rendered":"<p><\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=10b2d857-e455-4387-bbc8-4ad196db21a9\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>How much is national security worth? For the US, one answer is \u2014 apparently \u2014 a maximum of $7.5bn. That, at least, is what Nvidia and AMD may end up paying the US government, in return for being allowed to restart sales of their artificial intelligence chips to China. <\/p>\n<p>The numbers at stake are surprisingly small. According to President Donald Trump\u2019s latest deal, Nvidia and AMD can restart sales of \u2014 respectively \u2014 their H20 and MI308 chips to China in return for handing 15 per cent of revenues gleaned to the US government. China\u2019s AI accelerator market, which these chips serve, could grow to $50bn, Nvidia\u2019s chief Jensen Huang reckons. That sounds modest given the global market is expected to be more than 10 times that come 2030, and it will also be shared with local players. Even assuming it was entirely US dominated, that would only imply a $7.5bn take for government coffers; based on likely Nvidia and AMD sales, it is more like half that.<\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3c2308eb-a0d7-457d-9931-bea1f5754751?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3c2308eb-a0d7-457d-9931-bea1f5754751?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3c2308eb-a0d7-457d-9931-bea1f5754751?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3c2308eb-a0d7-457d-9931-bea1f5754751?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3c2308eb-a0d7-457d-9931-bea1f5754751?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ad259ee93-abb1-4105-b380-1eca27296b4c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ad259ee93-abb1-4105-b380-1eca27296b4c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3Ad259ee93-abb1-4105-b380-1eca27296b4c?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2Fa65a9ff0-76c4-11f0-9b1b-9fc022c3a5bb-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Column chart of Nvidia sales by region ($bn) showing Revving up\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>There is debate over the extent to which these chips pose security concerns. The H20 chip, designed specifically for China, is pretty constrained. But either way, this is a levy worth the price for the companies concerned. It enables them to shift piles of stock. Nvidia took a $4.5bn writedown on excess H20 inventory in the first quarter, following the US government\u2019s April 9 ban on exports. <\/p>\n<p>Even if the companies did not have stock to shift, chip sales have fat margins to help absorb the levy. Nvidia creams off overall gross margins of about 75 per cent, while AMD\u2019s dropped to 40 per cent in the latest quarter. And it may be possible to pass on some of the cost to Chinese customers. <\/p>\n<figure class=\"n-content-image n-content-image--full\" data-component=\"image-set\"><picture><source media=\"(min-width: 700px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3253d9f5-3ba1-4214-a3ae-a25d66453108?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3253d9f5-3ba1-4214-a3ae-a25d66453108?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3253d9f5-3ba1-4214-a3ae-a25d66453108?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=3 3x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3253d9f5-3ba1-4214-a3ae-a25d66453108?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=4 4x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A3253d9f5-3ba1-4214-a3ae-a25d66453108?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=5 5x\" width=\"3500\" height=\"2500\"\/><source media=\"(max-width: 490px)\" srcset=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A8c806812-3036-4751-9743-4e42c6c924dc?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=1 1x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A8c806812-3036-4751-9743-4e42c6c924dc?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=2 2x,https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/ftcms%3A8c806812-3036-4751-9743-4e42c6c924dc?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=490&amp;dpr=3 3x\" width=\"1500\" height=\"2000\"\/><img decoding=\"async\" src=\"https:\/\/www.ft.com\/__origami\/service\/image\/v2\/images\/raw\/https%3A%2F%2Fd6c748xw2pzm8.cloudfront.net%2Fprod%2F61aa8c80-76c4-11f0-a503-c561240ff260-standard.png?source=next-article&amp;fit=scale-down&amp;quality=highest&amp;width=700&amp;dpr=1\" alt=\"Line chart of Share price, $ showing Nvidia\u2019s resurgence\" data-image-type=\"graphic\" width=\"3500\" height=\"2500\" loading=\"lazy\"\/><\/picture><\/figure>\n<p>A couple of caveats pertaining to China rein in the cheer at the US chipmaking duo. One is that Nvidia\u2019s chips are already available in China, courtesy of shell companies in third countries and smugglers who hide them in prosthetic baby bumps and crates of live lobsters.<\/p>\n<p>The second is that, for US chip companies, a China sales boom may be shortlived. For evidence, look no further than the country\u2019s pincer-like progress in producing its own high-end chips and developing AI models that require less compute power. <\/p>\n<p>Epitomising the latter, DeepSeek wiped an aggregate $800bn off the market capitalisation of Nvidia and rival Broadcom in a single day, as spooked investors fretted about the outlook for high-end chips. When it comes to homegrown chips, Huawei has taken the lead and is close to narrowing the gap with US AI accelerators, according to Huang.<\/p>\n<p>This illustrates the key risk for the US: that one of the world\u2019s biggest markets is on the way to shuttering its own doors to US chip exports. Trump may be trading the US administration\u2019s stated national security concerns for dollars in the short term. Longer term, even that choice may be out of his hands.<\/p>\n<p><em>louise.lucas@ft.com<\/em><\/p>\n<\/div>\n<p>#Trumps #export #tariff #worth #Nvidia<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. How much is national security worth? For the US, one answer is \u2014 apparently \u2014 a maximum of $7.5bn. That, at least, is what Nvidia and AMD may end up paying the US government, in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":905,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[725,354,121,192,110],"class_list":{"0":"post-904","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-export","9":"tag-nvidia","10":"tag-tariff","11":"tag-trumps","12":"tag-worth"},"_links":{"self":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=904"}],"version-history":[{"count":0,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/posts\/904\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=\/wp\/v2\/media\/905"}],"wp:attachment":[{"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.worldpumpnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}