Chip Giant’s China Deal… And A Software Slump 8/11/25

0:02Live from the NESEC, market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. Striking a deal. AMD and Nvidia agreeing to give the government part of their China chip sales. The precedent that sets that it sets and what it could mean for the rest of the tech sector. And Matic Monday. Shares of the software stocks plunging despite of earnings beat this morning. Why the sector has been so under pressure and whether it can rebound from here. Plus Ford making a renewed push to produce cheaper EVs. Lilly tries to stage a rebound after last week's big drop.

0:32And pot stocks light up as rescheduling gets new momentum. Are these names worth a buy now? Our resident expert will weigh in. I'm Melissa Lee. Coming to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Dan Nathan, Guy Adami, and Julie Beal. And we start off with that major deal between two of the biggest U.S. chip makers and the White House. NVIDIA and AMD each agreeing to pay 15 % of revenues from certain chip sales to China to the U.S. government. In exchange, they will receive export licenses for their AI processors. This as President Trump announced a 90-day extension of the China tariff deadline, which was supposed to go into effect tomorrow.

1:08For the very latest, let's get to Eamon Jabbers in Washington. Eamon. Hey, Melissa, that's right. Take a look. Let's start with some of this video that we got just about an hour and a half ago here at the White House. This is the CEO of Intel arriving for his meeting with President Trump just a short time ago, captured by our cameraman on the street, Ashley Stringer. Look, the president had called for the CEO of Intel to resign, said he was conflicted by ties to China. Obviously a huge challenge for Intel. This meeting, it appears, has just now wrapped up because we see a post from the president on social media just within the past couple of minutes, Melissa.

1:46He says, I met with Mr. Lip Boutan of Intel along with Secretary of Commerce Howard Lutnick and Secretary of the Treasury Scott Besant. The meeting was a very interesting one. His success and rise is an amazing story. Mr. Tan and my cabinet members are going to spend time together and bring suggestions to me during the next week. Thank you for your attention to this matter. So the president, with a very positive tone here, coming out of a meeting with a man who he had said must resign from his position. So we'll endeavor to get a little bit more information about what happened in that meeting to seemingly turn the president's mind around on the CEO of Intel.

2:23Meanwhile, I am told by a White House official that the president has already signed the executive order to extend the deadline on China negotiations. That deadline was tonight expected to be signed. And I am told that it has been signed now. The White House has not publicly announced that or put out any documentation on it just yet. And then that deal that you were talking about, Melissa, with AMD and NVIDIA agreeing to give 15 percent of their revenues on those chips that are sold into the Chinese market back to the U.S. government. I've asked officials here throughout the day whether that's any kind of precedent.

2:59Are we going to expect to see other companies that want export licenses, export approvals from the U.S. government to pay 15 or 20 percent? What officials here are saying is that for now, the chip market they see as unique because it touches national security and AI. They don't see this model being rolled out with other companies being forced to pay. But they're not ruling it out. They're not saying they'll never do it. They just say that they see this as a one off kind of a situation, Melissa. So a lot going on here over at the White House today. All right. Eamon Jabbers, thank you. There is a lot to unpack here, but it's interesting that Eamon brings up the national security point, because remember, that's how this whole thing got started in terms of requiring export controls on this very unique sector, as Eamon had said.

3:49It's because of national security effort. And all of a sudden, 15 percent, it makes that go away, seemingly. Let's hone in on it. Yes. And we're going to discuss the AMD and Nvidia and what appears to be, you know, pay to play type of thing. But, you know, the intel calling for your calling for his resignation last week, he's compromised. I don't know if that was a word used, but that was implied in terms of his relationship with the Chinese government. OK, today and correctly, he gets himself to the White House. Good for him. That's a smart move. But if you think about what all this leads to, I mean, the whole built in the USA thing, Intel is should be the poster child for that.

4:26So in the wake of whatever this was, I think you're going to start hearing Intel's investment in the United States and how this is a national security play, homeland security. Intel dovetails very nicely with that. You know, I've said it for a while. It's been incorrect. But I think you buy Intel on this meeting. Look at that pop in the after our session on the back of those positive true social posts up more than two percent here. So clearly, Lipputan was important to the story. I mean, the U.S. has a lot of stake in Intel as well. We gave we, the taxpayers, gave Intel about nine billion dollars.

5:01And there's a lot more there for them, too. And so I do think if you're looking at one of the concerns around Intel was balance sheet. And if anything, they've been contracting. I do think this is good news, guys. Right. I mean, you know, playing ball with the White House right now is is pragmatic. Look, look what it did to Apple last week. Maybe I don't think it was totally that. But when you think about 24 percent of AMD sales or China Intel in their last fiscal year, somewhere 13 to 15 percent, depending how you're counting it, they don't really care. Now, should we care in a world where the U.S.

5:32is looking to export AI to the world? I think this makes a lot of sense. And in a world where as someone who spent a lot of time in emerging markets and watched export licenses be bought and sold and the horse trading that went on with it, it's what it feels like. And to extend the metaphor, data is the new oil. So if you think about the world that was 20 years ago, it was all about controlling resources. And now it's about controlling these resources. I agree. It makes no sense if in April the ban began because of security risks. How does security risks go away for 15 to 20 percent? They don't.

6:05But I do think this is probably good news for Intel. Yeah. And you keep hearing about precedent, right? Larry Kudlow must be rolling over in his grave right now because this is not free. Larry Stoll. Larry Stoll. He's still with us. OK, well, I'm just saying he must be frustrated over there, you know, wherever he is. Right. So you think about what's going on here. I mean, this is something that, you know, it's like if it is about national security, if it is something that we were bolstering a lot of our national champions over here to create manufacturing because of what we learned in COVID, because of our concerns about, you know, national security, you could have made the argument all along that Jensen Wang pushing for this.

6:39OK, for NVIDIA is not doing it in the best interest of our country. This technology is going to find its way into their defense and intelligence apparatus, which is being used against us, like in their whole host of other different things. So I just think it's really funny that, you know, this is an America first sort of thing. But if you want to pay, then you're fine. You get these export licenses. And so I know it should be troubling. The precedent that's being set is a problem. If you are a foreign company looking to do business here in the U.S., what does that say about this as an environment to do business with?

7:11So I think the whole point of the trade war is to bring manufacturing back here. And what Apple just did is reiterating some of the stuff that they were already doing to avoid, let's call it, the tariffs also, but not just on their own products coming here, but on the chips that they need to go into their products. It just seems like we're in a really, really messy place. I don't think it gets that much clarity anytime soon. We just pushed out these China tariffs. There are still 30 percent tariffs on stuff coming in from China right now. So, again, I think we left the thorniest issues for the end of it, but we still don't even have a deal with Canada or Mexico.

7:45It does feel, though, this is also the day where we got the 90-day extension on China. Now, maybe we were all expecting this, but it really does seem as if both sides want to quietly get a deal done. And it's interesting because if there was a place where the U.S. really could have had the greatest puff pigeon, using a yoga term, guy, because I know that's helpful for you, it would be with China. It would be where there was unanimous support. In fact, I would argue on the other side of the aisle, just as much support, more so. So I do think that for markets today, it was an interesting day. And Semi's really getting near those, actually extending to all-time highs.

8:22Yeah. We do want to show you some video. As Eamon had mentioned, Lip Boutan, the CEO of Intel, has left the White House. We have video of him exiting that meeting and departing the meeting from which Trump had actually posted that it was a very positive meeting, that his success story was amazing. And we did see Intel shares pop by about 2 percent at the after-hour session. Julie Beal, I understand the whole, you know, the free market capitalism aspect of not wanting companies to do deals, not wanting the U.S. government to extend their reach into the private sector and the discount that could imply, that it could imply on the private sector companies.

8:58But at the same time, this is a little bit of clarity for at least these two companies, AMD and NVIDIA. I think Stacey Rasgin of Bernstein put it very succinctly. Eighty five percent is better than zero when it comes to revenues going into China. I think that's some pretty expensive clarity that we're paying for. Right. Because if you think about it, first of all, these export taxes are unconstitutional. So we know that they're probably going to get challenged at some level. But I think the bigger issue is that if you remember that time period where everyone was investing in China in a really aggressive way because of the growth opportunities, and then the government started to really crack down on tech companies and try to limit their control, there was a fleeing of capital from those Chinese markets.

9:45I think that when you start to really mess around with the rule of law, which in the U.S. was really the envy of so many in terms of our capital markets, that damages the actual sanctity of it. And it creates a lot of hesitation for international investors who had been really propping up a lot of equity valuations in the U.S. to be as invested as they have been. And so I actually worry that there are real long term ramifications of actions like this. As the emerging market specialist here on the desk and having that with. That would be Tim. Exactly. Okay. Economies and markets where there is that implied discount because of government control, government activity in the sector, et cetera.

10:29When should we start to worry about this? Well, it just makes me feel like how different is this than I understand we're in semiconductors, we're in chips, we're in an area that really is an export dynamic. But think about Alibaba outflanking and essentially moving ahead of the Chinese government. Think about Russian oil companies striking deals around the world on the private sector, again, with sovereigns that need their oil. I mean, this is stuff that we've seen in EM land for a long time. And it is a case where suddenly the government says, great job. We're in here now. And I do think it ultimately, if in fact you are really under the thumb, and that's to be debated based upon today.

11:12I'm not saying that that's where we are. I think NVIDIA, Jensen has been, again, very tactful in terms of traveling the world with the president, with going to the Middle East, with selling AI to sovereigns, and being that part of essentially the conduit between the private sector and the government sector. But I will say, yes, it is something we have seen in other parts of the world, in countries where they trade at a significant discount to the U.S. because of that reason. You know what the kicker to all of this is? The Chinese government's response is NVIDIA has to prove that the H20 chip has no backdoor.

11:46So now they are worried about us putting our chips into their whatever it is and spying on them. They've heard the same from us. Of course. Listen, without question, and as a CEO in today's world, it's almost a requirement to do exactly what's going on. Again, we've talked about the fiduciary responsibilities that CEOs have to their employees and their shareholders. And if part of that is going to the White House and, you know, having a session, then so be it. It has to happen. But, you know, in terms of Intel, again, foundry business in the U.S., I mean, you could see where this is going. You know, we need a domiciled foundry business to have a strong, you know, keep track of our IP, all those different things.

12:28And in an odd way, if this meeting was as productive as it seemingly went, I mean, Intel finds itself in a really good position, I think. All right. So back to NVIDIA and what you were just saying is like, OK, so the Chinese, they know what's going on here now. You know, Trump just said, you know, pay me my VIG and you can sell in there. And what the Chinese haven't come back with is have they extended the export deal that they made on the truce that we gave three months ago on rare earth materials. Right. So they actually have a lot more leverage right now, because if Trump's going to go back to the whole taco thing.

13:00Right. Like then we have a situation where he's already he's basically lifted the ban. Then he put it back on and he lifted it for pay. Right. So he sees us going back and forth. And by the way, like export bans for licenses, that's something the CCP would generally do. So as far as the other side of this chip thing, the rare earth thing is far from, I think, settled. And I think it's obviously going to be a really important point about what goes on with whatever deal we end up striking with China. All that said, though, we go back to the first Trump administration. Those first Chinese tariffs went on in March of 2018.

13:33We did not have a framework for a deal or a phase one deal being implemented until January 2020. All right. For more on the China trade developments, let's bring in CNBC contributor DeWardrick McNeil, who served in the Obama administration. He's now senior policy analyst at Longview Global. DeWardrick, great to see you. I want to pick up where Dan left off, and that is we sort of were the Chinese now have a window as to how to proceed with negotiations more so than they did before, perhaps. I mean, you know, somebody I read this somewhere. The monetization of U.S. trade policy is what we're witnessing right now.

14:05You wrote discretionary industrial policy. All of it means effectively you pay enough and you get to play here. And so I'm wondering if this sort of gives Beijing a little bit of leverage in terms of how to navigate this next phase of trade talks. Hi, Ari and Melissa. I think it gives Beijing a lot of leverage, actually. To your point, what this has done is essentially confirm what Beijing had always believed. And that was Trump is more transactional than he is principle, particularly when it comes to national security. And if you press hard enough, if you incentivize and if you show that you are persistent, that eventually you will fold.

14:48Look, I think it was said by Courtney earlier that this is not clarity. I agree with that. Chinese have very clearly said, regardless of what you decide on the H20, we have our own concerns. And we're going to ask you to prove that, which opens up a whole lot of know-how when they start to dissect this chip, which they will. But what the Chinese have also said is we don't really think that the H20 is a quality chip anyway. What we're looking for are the H100 and the B100. And what the Trump administration has done with this decision is essentially said to Beijing, if the price is right, maybe we'll look at the H100 and the B100.

15:24So I think you've opened up a Pandora's box here with this decision. And I don't think the Chinese are going to back off. They're going to press advantage here as we move forward in these next 90 days. Duarte Gautam, so what are they looking for? What is what is the move on the chessboard for the Chinese here to counter this? What would be the best outcome for them? I mean, we we kind of get it's not just about keeping tariffs where they were before Liberation Day. But but but drop us into the tech context where obviously China has their own chip aspirations and they have their own goal to maintain global leadership.

16:01So what does today mean for them? Yeah, I think you're absolutely right to kind of focus on what does this mean long term and long term. Tim, I think what we're trying to suss is where the Chinese are looking to fill gaps in their own development for high-tech chips and frontier models on AI. Like, that's the big game here. And I think for the Chinese, there are lots of deltas between what NVIDIA can do and what some of their high-end chip companies can do. So they're looking to close this gap. I think Trump has given them that window. But let me just say quickly about what it means for NVIDIA in terms of market share.

16:40Tim, and you and all the traders are familiar with this. The Chinese will continue to welcome NVIDIA with limits over a period of time until they can close these gaps. And then they're going to get the Volkswagen treatment, the Tesla treatment, the Apple treatment, the Starbucks treatment. And so the real question I have, Tim, is how long will it how many times is Lucy have to pull this football before our Charlie Brown corporation stopped running to make the kick? I just don't understand this move. There's no long-term future for NVIDIA in China. DeWard, in terms of China, the economy there, what position are they in to sort of play hardball?

17:19Because clearly things have been slowing in a pretty precipitous fashion. Yeah, this is a great question. Look, not much has changed from our conversations about the Chinese economy from last year. Let's be clear. We still have a consumption problem. We still have a problem with deflation. over capacity. The Chinese government has even owned this as a problem now. So there are some real concerns about the Chinese economy. But again, it comes back to who can stomach the most pain. And as we talked about earlier in the year, the Chinese are not going to fold. They are prepared to take some pain.

17:56But ultimately, and it was mentioned earlier, their trump card here is our over-dependence on critical minerals. So they're prepared to leverage that as much as they can with a weak economy and play a strong hand based on our vulnerabilities with respect to critical minerals. DeWardrick, great to see you. Thank you. Thank you, Melissa. DeWardrick McNeil. All right, Julie Beal, so would you invest in Chinese stocks? That's tough. I think that, you know, we can talk about trade all we want, but the thing is, is that it doesn't change the housing situation in China, which is just so overbuilt. and it's really difficult to dig out of that, I will say it does seem like consumption seems to be starting to pick up.

18:42And that really has been the linchpin to transitioning that economy away from solely being an industrialized country to one that can take on more consumption. I think what people miss, I think, quite often about China is we make this assumption that the reason why it has industrialized the way that it has is because it's just cheap to do things there. And that really misses how much development, how much innovation, how much growth, how much efficiency happens in those markets. You can't do some of the things that the Chinese economy can do. You can't move goods the way they can. And we lose sight of that.

19:16And I think we overplay our hand. And, you know, I think Doric's right. They will starve their people if they have to for the sake of their principles. They are used to taking on lots of pain. Remember the COVID lockdowns. So I think this is a very difficult player to be playing chess with. There is an expertise in manufacturing that exists in China that I think gets overlooked in the discussion about making T-shirts and cheap stuff over there. There's also, as you mentioned, Julie, a lot of innovation in terms of the biotech sector. We hear time and time again deals being made for different molecules, you know, a license agreement by big cap pharma here.

19:53I wanted to ask you, though, about China exports, because in July it looked like the outbound shipments were actually higher, even though shipments to the U.S. were down 22 percent. So stuff is going elsewhere. Well, and is it backdooring its way into the U.S.? It's not so much that, but one of the dynamics of trade around here, and we saw this with the BRICS, they're getting together to cut new deals, and this is a lot of bilateral. It's less about global. And I think that's exactly what's happening here. And I would just point out that if I had to rank the winners today in the semiconductor world, today.

20:26It's definitely to me. AMD being at the head table here is a win in terms of the relative amount they have to gain by Intel, as Guy pointed out, I think, as a winner. Taiwan Semi is the one semiconductor company that every country in the world is trying to do business with and courting them to build out in their own land. Taiwan Semi is a must own real quick. I mean, China's trade surplus. They just one point two trillion dollars. That's a record. It's been lower left, upper right. So to your point, I mean, your point as well, it's going somewhere. Yeah. Meanwhile, gold settling almost two and a half percent lower today.

20:59This comes after President Trump posted on Truth Social that gold imports will not be tariffed. The precious metal settled at a record on Friday. Guy. Yeah. Look, it's a big move, obviously, in terms of dollars, in terms of percentage. I don't think the gold story is predicated on tariffs and import and export taxes and those types of things. I get maybe there's some fluffing on the back of that, but nothing has changed on the gold front, in my opinion, whatsoever, Melz. Coming up, Ford plugging back in how the automaker is charging off its electric vehicle ambitions and why the CEO is calling it a Model T moment.

21:32We've got the details next, plus rolling back into the cannabis craze, the report getting marijuana stocks sky high today and what our own Tim Seymour sees in store for the group. Straight ahead. Do not go anywhere fast when he's back in two.

21:52Welcome back to Fast Money. Ford re-upping its plans in the EV market, announcing it'll invest$2 billion in a Kentucky plant to roll out more affordable electric vehicles. Phil LeBose spoke with Ford CEO Jim Farley about the company's ambitions. Phil. And this is an ambitious move by Ford, Melissa. What they're basically doing is saying the old way that we tried to do EVs wasn't working. We got to lower the cost. We have to be more efficient and we have to be quicker. So here's the new Ford EV plant. By the way, they've been working on this at their Skunk Works operation in California over the last couple of years.

22:24It's a$2 billion investment in their Kentucky plant, which will be retooled. They will secure 2 ,200 of the existing jobs there. You might be saying, wait a second, they have more than 2 ,200 jobs? Yeah, about 600 fewer jobs will be needed once the plant is converted to EVs. Does that mean those people will be laid off? Not according to Jim Farley when we talked with him earlier today. We have two battery plants that we're going to need to staff. There's plenty of jobs for the people here. And what we haven't announced, which we will, we'll build more body styles than the first one coming out.

22:57So the 2200 is just the beginning. And by the way, you didn't mention it. We're adding 1700 new jobs up in Michigan that don't exist today. So Ford's adding jobs. We'll continue to add jobs. The 600 people here will have plenty to do. OK, so what is the new EV coming from Ford? Well, they haven't given us a peek at it yet, but they did tell us it will be a midsize pickup truck expected to launch in 2027. The estimated price,$30 ,000. That's a key point because higher priced EVs, they're just not selling. And what the what the industry needs, what Ford needs are more affordable priced models. That's the reason, as you take a look at Ford sales right now of its electric vehicles down 10.7 percent or in the first half, they were down 10.7 percent.

23:43And the question is how much they're going to grow beyond this third quarter surge once the federal tax credit goes away at the end of September. Keep in mind, as you take a look at Ford, it's year to date. Yes, the stock is moving higher, but the EV sales or the EV losses, they continue to mount$1.3 billion in the second quarter. Melissa, they lost almost$5 billion, I think, last year. So this is their chance to do a reset, and they expect it to be successful when they complete it in 2027. Think faster, lower costs, more efficient. That's going to be the key if they're going to be able to be competitive.