Top Senate Democrats are urging President Trump to rethink his plan that allows artificial intelligence chip sales to China. In an open letter, they warned that the deal could contradict U.S. national security goals. The policy gives chip makers Nvidia (NVDA) and Advanced Micro Devices (AMD) the right to sell advanced AI chips to China if they share 15% of sales revenue with the U.S.
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The Senators said that any move which gives China more access to high-grade chips could strengthen its AI sector. They pointed out that such an outcome could hurt U.S. defense and tech goals. Therefore, they urged Trump to pause and weigh the risks before moving forward. The letter reflects rising concern in Washington about the role of AI chips in both global trade and military use.
What It Could Mean for the Companies and Investors
For investors, the core issue is whether this letter leads to a policy shift. If Trump does not change course, the deal stands, and both Nvidia and AMD keep access to China, the largest global chip market. However, if Trump rethinks the move and imposes new curbs, the financial hit could be sharp.
Nvidia earns most of its revenue from selling chips designed for data centers, particularly those used in AI. China has been a major market for these products, accounting for nearly a quarter of Nvidia’s revenue even after earlier trade restrictions. If new rules cut off those sales, the company could lose billions in annual revenue. Such a setback could weigh heavily on Nvidia’s growth outlook and its share price.
As for AMD, it has a smaller share of the AI chip space, but its plans depend on growth in this market. If it loses China sales, the company may fall short of its targets for data center gains. In turn, this could slow its race with Nvidia and limit returns for investors who are betting on strong AI growth.
As a result, the open letter marks a sign of ongoing tension that could hit chip makers in real ways. While the outcome of the policy fight is not set, the risk for both Nvidia and AMD is that a large source of demand may shrink at a time when growth in AI is key to their value story.
By using TipRanks’ Comparison Tool, we’ve compared Nvidia and AMD to gain a broader look at both companies’ financials and overall sentiment.
