Trump's drag on corporate America
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Nvidia's otherwise stellar earnings were clouded by one thing: export controls, which were overturned only after the company agreed to give a 15% cut of China chip sales back to Uncle Sam.
Why it matters: It's the latest example of President Trump inserting himself into the private sector as chairman of all boards, regardless of the impact that has on free markets.
Catch up quick: Nvidia reported zero sales of its H20 chips to China for the quarter.
- CEO Jensen Huang said that's an untapped market that represents a "$50 billion opportunity."
- Nvidia's CFO added that the company could make up to $5 billion more next quarter if restrictions are lifted.
Zoom in: The 15% revenue split is also riddled with confusion.
- In a filing, the company wrote that any revenue split with the government "may subject us to litigation, increase our costs, and harm our competitive position and benefit competitors that are not subject to such arrangements."
Between the lines: The Trump administration is harming Nvidia's competitive advantage, according to the filing.
There are plenty of other examples this year of Trump telling businesses how to do business:
- 💰 Trump said Intel's CEO should resign before the U.S. took a 10% stake in the company.
- 📲 Apple was squeezed for another $100 billion investment commitment to avoid huge tariffs for not making its phones in the U.S.
- 🏭 U.S. Steel had to hand over a golden share to Trump's personal control to reverse the rejection of its sale to Nippon Steel.
- He's also trying to fire Fed governor Lisa Cook and rail regulator Robert Primus.
What they're saying: Business interests say the biggest problem is clarity — something that has been in short supply this year between tariffs, policy changes and the like.
- "Businesses need certainty for planning. That's why they like clear rules of the road," Neil Bradley, chief policy officer of the U.S. Chamber of Commerce, told Axios recently.
The bottom line: It's hard to be certain, or plan for the future, if you don't know when or how the president of the United States will turn the might of the government against you.
What to watch: Huang reiterated the importance of opening up business with China so that the U.S. can remain competitive in AI in his interview on Fox Business.
- Whether that pitch is enough to convince the White House is a critical question for investors.
