Hello there! Today, we’re diving into the fascinating world of high-tech trade and AI hardware — buckle up!

Nvidia and AMD are now paying the U.S. government a 15% cut of their profits from selling high-end AI chips in China. This move marks a shift from security concerns to tariff tactics, according to the Financial Times. The two giants will share revenue from their specific chips, Nvidia’s H20 and AMD’s MI308, as part of new licensing agreements with the U.S. government.

Previously, the U.S. had placed restrictions on selling certain AI components to China, but these restrictions eased after Nvidia committed to significant investments back home and promised to boost data center infrastructure in the U.S. Nvidia’s focus on the H20 chips, designed for the Chinese market, is a key part of this new strategy.

Many critics and security experts have voiced concerns, with some urging the government to reconsider these permits. Nevertheless, Nvidia and AMD are moving forward, entering into arrangements that comply with the new trade environment, while the U.S. continues to monitor the situation closely.