TL;DR:
• Nvidia and AMD agreed to pay 15% of China chip revenues to US government
• Apple CEO Tim Cook committed $600B in US investment over four years
• Trump threatens 100% tariffs on chip imports, exempting companies "building in the United States"
• Analysts expect more Big Tech companies to strike similar deals
Nvidia and AMD just made unprecedented deals to pay the Trump administration 15% of their China chip revenues, while Apple pledged $600 billion in US investment. These extraordinary arrangements reveal how desperate Big Tech has become to avoid crippling tariffs that threaten their core businesses.
Nvidia and AMD just struck deals that would have been unthinkable six months ago. The chip giants agreed to hand over 15% of their China revenues to the US government in exchange for continued access to the world's second-largest economy. It's a arrangement that some strategists are calling a "shakedown," while others question whether it's even constitutional.
The White House confirmed the unprecedented revenue-sharing agreements just days after Apple CEO Tim Cook made his own pilgrimage to the Oval Office, emerging with plans to increase the company's US investment commitment to $600 billion over four years. The move was widely seen as Cook's bid to keep Apple out of Trump's tariff crosshairs—and it appears to have worked.
"The flurry of deal-making is an effort to secure lighter treatment from tariffs," Paolo Pescatore, technology analyst at PP Foresight, told CNBC by email. "In some shape or form, all of the big tech companies have been negatively impacted by tariffs."
The urgency behind these deals becomes clear when you look at the numbers. Apple alone incurred $800 million in tariff costs in the June quarter, while Trump has threatened to impose a 100% tariff on semiconductor imports—a move that would devastate companies relying on Asian manufacturing.
