MediaTalk | Season 3 | Ep. 50 - AI Chips, Global Supply Chains and Tech Policy — Getting Ready for 2026

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Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with the S&P Global Market Intelligence tech, media, and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global Market Intelligence, where the news and research staff explore issues in the ever-evolving media landscape. Today, I'm joined by Stefan Modrich, my colleague on the TMT News team. Stefan covers tech policy, and he is the author of Washington Wrap, which you can find on Cap IQ Pro. How are you doing today, Stefan?

Stefan Modrich: Doing well, Mike. Glad to be here.

Reynolds: Before we get started on many things artificial intelligence and NVIDIA, I wanted to bring our listeners up to speed on Stefan's running exploits. When we last spoke in September, Stefan was about to go marathoning in Germany as a prelude to making the move to the New York event. At some point, how'd you make out, Stefan?

Modrich: It was a great experience. Thanks for asking about it. I managed to finish in exactly three hours and 58 minutes. So I accomplished my goal of sub-four hours. In the process, I managed to run enough races to qualify to earn a bid in the New York Marathon next year. I'm excited for that.

Reynolds: Alright, we'll be keeping tabs on that as well. Congratulations. As to NVIDIA, last time we touched upon its agreement with Advanced Micro Devices to pay the US government 15% of their revenue. That, I believe, is part of the Trump administration's broader strategies around asserting leverage over crucial US supply chains and industries. Stefan, we covered this a little bit last time. Bring our listeners up to speed on what that might mean.

Modrich: Sure, Mike. I think one thing that's important to mention from the start is, while it's true that NVIDIA does have some revenue from chips that it sells to China, it's not the Blackwell chips, which are these advanced AI chips that you're hearing most often about. The current export control regime is still allowing Blackwell chips to be exported to allies that have been essentially shortlisted by the US. In recently reaching a deal to export to Saudi Arabia, they've even gone beyond that kind of shortlist of nations in the Pacific, like Japan, Korea, and India—and those you would typically see on that G20 list.

Reynolds: Alright. So in early November, Market Intelligence published a piece entitled "US Promotes AI Exports to Allies, Blocks China Access to NVIDIA Blackwell Chips," which you just mentioned. The key takeaway here is: some chips are allowed to be sold from NVIDIA to China, or not? I'm a little confused.

Modrich: Sure. As of December 8, President Donald Trump announced that the US would allow NVIDIA to ship the H200 GPU chips to approved customers in China and other countries. The H200 is a chip that's estimated to be about twice as powerful as the H20, which was the chip that NVIDIA had designed before this to be able to comply with US export controls for chips that were allowed to be shipped to China. But they're a step below the Blackwell chips. Basically, the condition there is that it will still allow for national security interests to be protected, according to the Trump administration. And there's also a condition that adds onto the revenue-sharing agreement we talked about last time, that would collect as much as 25% of the revenue. As we're speaking today, China has not yet approved imports of H200 chips. We'll have to wait and see what Beijing does there.

Reynolds: Interesting. President Trump did an interview on "60 Minutes." He talked about this; it came after his meeting with the Chinese President, Mr. Jinping. Are there any thoughts, or is there any thawing, as you mentioned, the CEO from NVIDIA would like some of this to happen?

Modrich: No. But I would caveat that the Trump administration's national security strategy was published, and the language was actually less adversarial than we've seen in the past, and actually more toward getting on the same page—even going as far as to say that the US and China should be engaged in mutually beneficial trade relationships. So that is a stark departure from some of the language that we hear, especially on the Hill from the China hawks.

And so that is going to be something interesting to see—how that is squared with the desire to simultaneously maintain that national security hawk posture with the free-market posture. And I think that's probably the fundamental tension that the coalition of the GOP faces.

Reynolds: Interesting. So at the same time, if there might be some movement toward a resolution, that's one thing, but I think there's some—as you may have alluded to here—if the better chips were to get into Chinese hands, so to speak, the US advantage in AI computing would be lost. I think there's some back and forth about that.

Modrich: Yeah, there's a lot of nuance in unpacking that specific question because Huang and NVIDIA are in this camp that they believe exporting the American AI stack is a force for good in the world, essentially. And so that is their way of messaging their desire to expand to these untapped markets, phrasing it with the language of: China is the second largest market, and we, being the US, should not concede that — not punt it — without even attempting to compete there.

I haven't yet heard one Republican or Democrat say that they agree with NVIDIA's view that the Blackwell chip should be available in China. It does seem like the sorts of arguments that are winning are the more sentimental and nationalistic ones. At least that's what we've seen from the way this is talked about on the Hill. But I think a better way of looking at that is — Huang said, for example, that China has twice the amount of electrical capacity that the United States does…

Reynolds: Right. He's also advocating for the US to increase its electrical capabilities, its energy capabilities.

Modrich: Yeah. And as our data center experts at 451 know, there's an obvious correlation between the increased power demand and the increased output of these large language models and these AI chatbots and other various AI-powered tools. That's going to go hand in hand here for decades to come. So the infrastructure, the knowledge, the funding—a lot of those things—those who advocate for greater synergy between the US government and the tech sector point to China as somewhat of an analog or a model. Not always necessarily that we should be copy-and-pasting what they're doing, but they do look to their more government interventionist model.

Reynolds: Interesting. The situation with China here also holds ramifications for other countries as well.

Modrich: Yeah. Some of them we alluded to earlier—definitely Japan and Korea. I spoke specifically with some experts on Korean memory chip producers, and because some of those are some of the bigger suppliers to NVIDIA, they were very adamant that this is a vital component to the NVIDIA supply chain for producing those Blackwell chips. And given how intricate and delicate this whole situation is, it remains a very globally connected system right now. So to have any sort of policy or geopolitical disruption to that would have very dire consequences, potentially.

Reynolds: Okay. Alright. You had alluded earlier that Mr. Huang had been on Capitol Hill this past week. What were some of your takeaways? I don't know how many days he was there, but it seems like he made a lot of stops along the way.

Modrich: Yeah, he definitely seems to be a more frequent guest these days. And given the business he's in, one would presume for good reason. He was there to meet with Senate Republicans on the banking committee, and then he also met with President Trump while he was in town. And then, as usual, the things he says make headlines. But some of the things that were particularly striking from a nitty-gritty policy standpoint were that he essentially made a tacit endorsement of an AI moratorium — which, just to catch folks up on that — basically the effort to direct the federal government to preempt any existing state or local AI laws with one comprehensive federal law. That was an effort that failed to get through the Trump budget bill this summer, but it's been resurrected. Although it's looking unlikely to get through a second time here, there's also been talk about an executive order that could push that same measure through. So it does seem like there's little daylight between NVIDIA and the White House on that specific issue.

Huang also said that he was pleased with the removal of a bill called the GAIN Act, which would have imposed a lot of conditions on American tech companies who wanted to export chips abroad. For very understandable reasons, if you think about it from a business perspective, he was very pleased with the decision to spike that bill because of the ease of the compliance burden on the semiconductor industry.

Reynolds: You can read more about Stefan and Mr. Huang on Washington Wrap, which, again, as I mentioned, is part of Cap IQ Pro.

As we get to the end here, I wanted to see what Stefan, as we move from '25 and transition to the New Year, what are you going to be looking at? What are some of the things you want to keep tabs on immediately?

Modrich: Sure, Mike. I think some of these things will be no surprise to a lot of our regular readers and "MediaTalk" listeners. This debate over how to regulate AI and the infrastructure needed to make it possible, that we've been talking about here today, is indeed going to remain a very hot topic in 2026 and beyond.

Just to give some examples—if you're not necessarily seeing that kind of broader policy debate manifest itself and you're curious about why that makes a

difference, tune into your local city council meeting and you have very likely probably heard a conversation about whether or not driverless vehicles are going to be allowed in your city. That's been happening all over the country with Waymo and then Tesla's robo-taxi and things like that. And that's one way. And then, another kind of thing that probably hits close to home for a lot of people is this debate over what devices will be allowed in school classrooms—whether that's tablets, smartphones, laptops. There's been a lot of pushback recently, especially given the rapidly changing internet-based tools and AI-based tools that are now at students' disposal. It's a whole different deal than just having a Google web browser at your disposal, right? And now you have ChatGPT and all these other things, so that presents a lot of academic integrity issues and things like that. That's a whole other thing to grapple with.

And then something that will have already happened by the time this episode airs, but will certainly not have reached an outcome yet, is the Supreme Court case Slaughter v. Trump, which is the case of the two FTC Democrat Commissioners who were fired by Trump. We will certainly not have finality to that anytime soon—maybe not even in the first half of 2026. But that will definitely be something that will be closely watched when that does happen, as well as cases involving tariffs.

Finally, I think, as you well know, Mike, on the M&A side, it'll be fascinating to see what happens with this Netflix-Warner Bros. acquisition. What other shoes will drop potentially in that space? You and I are following how the NIL markets are changing and where tech figures into that whole deal and where Congress is maybe looking to step in there. Same thing on the sports betting side. So these are just a whole host of issues across our TMT space that all have some kind of regulatory component to them. And I think, as our listeners know, these will continue to be closely watched by us in the months to come.

Reynolds: Interesting stuff. There's no shortage of things that Stefan is keeping tabs on, and we appreciate him being here today as we close this episode of MediaTalk. Stefan, thanks for joining us again, and we will have you back on the program sometime, probably before the first quarter ends.

Modrich: Looking forward to it, Mike. And happy holidays to you and to all of our "MediaTalk" listeners.

Reynolds: Alright, and this is Mike Reynolds. Thanks to all of you for listening. We're going to catch up soon in the next installment of "MediaTalk." As Stefan said, enjoy the holidays, everybody, and have a good one.