NVIDIA CFO: "There is no need to pay a 15% commission unless the U.S. government formally enacts regulations."

According to the Zhitong Finance APP, NVIDIA (NVDA.US) stated that a non-conventional plan by the Trump administration to charge the company a 15% commission on sales of artificial intelligence chips to China has not made progress and may pose legal risks. NVIDIA explained that the U.S. government has not indicated how it will formulate relevant regulations requiring the chip manufacturer to pay fines. According to the company's Chief Financial Officer Colette Kress, discussions between NVIDIA and the U.S. government are still ongoing.

The U.S. government hopes to collect a 15% commission as a condition for allowing NVIDIA and its competitor AMD (AMD.US) to resume sales of artificial intelligence chips in China. Previously, the U.S. government prohibited such sales in April and only agreed to issue the necessary licenses earlier this month.

In an interview, Kress stated that if the plan is not formally established, NVIDIA should be able to sell products in China without paying the commission. She said, "We have been communicating, and if there is no movement, I have the license. I do not have to pay this 15% (of revenue) until I see the actual regulatory documents."

The White House and the spokesperson for the Department of Commerce, which oversees U.S. export control programs, did not immediately respond to requests for comment.

NVIDIA's products are at the center of the U.S.-China artificial intelligence competition. Previous restrictions nearly excluded NVIDIA from the Chinese artificial intelligence processor market, but now it is beginning to obtain permission to resume sales. Currently, NVIDIA has not included this revenue in its guidance.

NVIDIA also acknowledged that the U.S. government's commission plan itself carries risks. The company stated in a document: "Any revenue-based fee requirement proposed by the U.S. government could expose us to litigation, increase our costs, and harm our competitive position, benefiting competitors not bound by such arrangements."

The chip manufacturer has been walking a tightrope, trying to satisfy both the U.S. and Chinese governments. NVIDIA and its peers argue that being excluded from China would harm U.S. interests, as it would create opportunities for Chinese competitors. They also stated that these restrictions have caused U.S. companies to lose funding for research and development, which is key to maintaining their competitive edge.

On Wednesday, NVIDIA's forecast for the current quarter was not as optimistic as some analysts had expected. The company stated that it excluded up to $5 billion in potential sales from Chinese data centers from its forecast due to uncertainty over whether geopolitical tensions would allow it to fulfill orders.

Kress indicated that she believes some revenue will gradually come in over time, but she cannot determine the specific amount or timing.

NVIDIA had designed a slightly less powerful H20 chip to comply with the export restrictions imposed by the Biden administration; however, the Trump administration further tightened these restrictions in April. This move forced the chip manufacturer to recognize a $4.5 billion impairment on unsold H20 inventory in its first-quarter results announced in May.

The company is currently looking forward to a new generation of artificial intelligence chips based on its Blackwell design, which can be tailored for China. Trump has stated that he is open to this ideaNVIDIA CEO Jensen Huang stated in a conference call on Wednesday: "We have the opportunity to bring Blackwell to the Chinese market, which is feasible. We just need to continue advocating for the rationale and importance of American tech companies leading and winning the AI race."