Nvidia and AMD to Pay 15% of AI Chip Sales Revenue to US Government in Historic Deal Allowing Re-entry into Chinese Market
Nvidia and AMD will soon commence remitting 15% of their earnings from AI chip sales to the U.S. government as part of an unprecedented agreement. This development marks the first time since April that these companies can legally sell their AI-enhanced chips in China.
The financial arrangement is a condition for export licenses to be reinstated for the Chinese market, following the U.S. government’s ban on sales earlier this year due to security concerns.
Details of the deal have been confirmed by sources close to the matter, who spoke with the Financial Times and The New York Times. Nvidia has stated, “We adhere to the rules set by the U.S. government for our participation in international markets. Although we haven’t shipped H20 chips to China for several months, we hope export control rules will enable America to compete in both China and worldwide markets.”
Nvidia declined to comment further on the specifics of the deal, while AMD has yet to publicly confirm its involvement. The White House has also remained silent on the matter. Sources close to the situation report that the U.S. government is still deciding how to allocate the additional revenue.
The H20 chip was developed by Nvidia in response to export restrictions imposed by the U.S. government on the Chinese market in 2023, during the Biden administration. The chip offers less power than the company’s most advanced technology and was initially approved for sale in China.
Earlier this year, sales of the N20 chip and AMD’s rival MI308 were banned by Trump’s government. In July, the U.S. government announced it would be reinstating sales for Nvidia; however, the Trump administration did not immediately reinstate the necessary export licenses for these sales.
The export licenses for H20 chips were granted from August 8. Reports suggest that Nvidia’s CEO, Jensen Huang, recently met with former President Trump, during which they discussed the agreement of sharing 15% of revenue with the U.S. government.
A group of security specialists sent a letter in July after the government announced it would be reopening sales of the chips to China. The letter was signed by 20 security and economic experts, including former officials from the Trump administration.
The letter stated, “AI-optimized chips will not just power consumer products or logistics; they will enable autonomous weapons systems, intelligence surveillance platforms, and rapid advances in military decision-making.”
“By supplying China with these chips, we are facilitating the modernization and expansion of the Chinese military. In the Chinese system, the line between optimizing an online marketplace and optimizing military logistics does not exist—and we should not pretend otherwise.”
Nvidia responded to the letter, stating, “The H20 helps America gain the support of developers worldwide, promoting America’s economic and national security. It does not enhance anyone’s military capabilities, and the U.S. government has full visibility and authority over every H20 transaction.”
It remains unclear if other companies are considering similar deals to AMD and Nvidia.
