Nvidia and AMD agree to share 15% of China AI chip sales revenue with US government under new export license arrangement.
Nvidia and AMD have agreed to hand over 15% of their China chip revenues to the U.S. government in exchange for export licences, an arrangement experts say has no precedent in U.S. export control history.
The deal, confirmed by officials familiar with the matter, applies to Nvidia’s H20 chips and AMD’s MI308 chips, both designed for artificial intelligence workloads. These licences, granted last week, come after months of uncertainty and high-level political discussions.
A U.S. official said Nvidia will share 15% of its H20 chip sales in China, while AMD will contribute the same percentage from MI308 chip sales. What the government plans to do with this money remains unclear.
How We Got Here
Earlier this year, the Trump administration banned exports of Nvidia’s H20 chips to China, citing national security concerns. However, in June, just days after Nvidia CEO Jensen Huang met President Donald Trump at the White House, that decision was reversed.
For several weeks after, Nvidia awaited formal approval from the Bureau of Industry and Security (BIS), the agency responsible for export controls. During a meeting with Trump on a Wednesday, Huang raised concerns about the delay. By Friday, the first export licenses were issued allowing sales to China to resume under a new revenue-sharing agreement.
Nvidia later stated:
“We follow rules the U.S. government sets for our participation in worldwide markets.”
A First in the U.S. Export Policy
Industry experts say this move is unprecedented. Traditionally, export licenses are granted or denied based on security assessments not used as leverage for revenue.
Critics worry the H20 chips could enhance China’s military AI capabilities. Liza Tobin, a former National Security Council official, remarked:
“Beijing must be gloating to see Washington turn export licences into revenue streams. What’s next, letting Lockheed Martin sell F-35s to China for a 15 per cent commission?”
Nvidia rejected these military-use claims, calling them misguided and stating the H20 chip is unsuitable for such purposes. The company also said:
“While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”
The Stakes for Both Sides
China remains a crucial market for both Nvidia and AMD. Analysts estimate Nvidia could generate around $23 billion in H20 sales to China in 2025. AMD also faces significant revenue risks.
For the U.S., the deal offers a direct financial gain but raises questions about whether economic benefits outweigh security concerns.
The timing is delicate. Washington and Beijing are engaged in trade talks, and Trump aims to pave the way for a summit with Chinese President Xi Jinping. Meanwhile, Beijing is pushing for eased restrictions on high-bandwidth memory (HBM) chips, another essential component for AI technology.
Our Vision
This deal shows the U.S. turning export licenses into a revenue stream, a move that may protect business interests but risks empowering a rival’s AI ambitions. We believe policy should defend innovation without trading away long-term security for short-term profit.
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