Nvidia and AMD Agree to Pay 15% Tariffs on AI Chip Sales to China as US-China Trade Discussions Evolve

U.S. tech giants Nvidia and AMD have agreed to pay a 15% tariff on their high-end AI chip sales in China, according to an unnamed government source cited by the Financial Times. The companies will share revenue generated from sales of Nvidia’s H20 AI chips and AMD’s MI308 chips in China, with the U.S. government issuing licenses for their sale in the country.

In April, the Trump administration had imposed restrictions on the sale of certain high-performance AI inference chips to China but later suspended the ban after Nvidia pledged $500 billion worth of data center investments in the U.S. In July, Nvidia announced it would resume sales of its H20 AI chips to China, which were specifically designed for the Chinese market following restrictions by the Biden administration.

The company’s decision to restart sales was reportedly connected to trade negotiations with China regarding rare-earth elements, essential for producing components such as rechargeable batteries for electric vehicles. According to U.S. Commerce Secretary Howard Lutnick, Nvidia’s reversal in policy was a result of these discussions.

However, the administration’s approval of Nvidia’s H20 chip sales has been met with criticism from national security experts and former government officials who have urged the government to reconsider its decision.