The Trump administration’s agreement to allow Nvidia Corp (NASDAQ:NVDA, ETR:NVD) and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) to sell AI chips in China under export licenses, in exchange for 15% of profits, removes a key growth barrier and could spark the next phase of the AI boom, Wedbush analyst Dan Ives said.
Ives called the deal “highly unusual” but said it was a “major growth catalyst” for Nvidia, AMD and the broader US Big Tech sector over the next 12 to 18 months.
“In this AI arms race between the US and China, it’s a careful balance by Trump to focus on national security issues while making sure we do not clip the wings of the best tech companies in the world,” Ives wrote.
Restrictions on selling high-end AI chips to China, in place since April, risked giving Huawei a $15 billion annual advantage, Ives said, calling such a scenario a “self-inflicted wound” for the US. The agreement avoids that outcome while securing a revenue stream for the White House, he added.
Ives said US companies including Nvidia, Microsoft Corp (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG)'s Google, Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB), Amazon.com Inc (NASDAQ:AMZN) and Palantir Technologies Inc (NYSE:PLTR) currently lead the global AI market, though Chinese firms such as Huawei, Alibaba, Baidu, Tencent and Xiaomi are rapidly advancing. The supply of Nvidia chips remains a key bottleneck for China’s AI ambitions, he noted.
“The Middle East is a perfect example,” Ives commented, pointing to AI buildouts in Saudi Arabia and the UAE being driven by US firms. “Paying a 15% fee to the White House is a small price to pay for access to China and other key markets.”
Ives is predicting trillions of dollars in opportunities across chips, software, consumer and energy sectors in what he described as the “4th Industrial Revolution.”