Nvidia and AMD have reportedly agreed to give the United States government a share of revenues from chip sales in China as part of a deal to secure export licences for their products. According to multiple outlets, Nvidia will share 15 percent of revenues from sales of its H20 AI chip, while AMD will pay the same percentage of MI308 chip revenues.
This unorthodox agreement comes after the Trump administration last month agreed to reverse a ban on the sale of Nvidia’s H20 chips to China. The US Commerce Department has started issuing licences to Nvidia to export its H20 chips to China, removing a significant hurdle to the artificial intelligence bellwether’s access to a key market.
Nvidia said it follows US government rules for doing business in overseas markets. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” a company spokesperson said. “America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”
Trade experts have expressed concern about the implications of linking controls on sensitive technology to monetary payments. Christopher Padilla, the former head of the US Commerce Department’s International Trade Administration, called the agreement “astonishing”. “If the Trump administration is allowing companies to buy their way past export controls imposed to protect US national security, we are in very dangerous waters,” Padilla said in a post on LinkedIn. “A mix of bribery and blackmail that is certainly unprecedented and possibly illegal.”
Peter Harrell, a nonresident fellow at the Carnegie Endowment for International Peace, also questioned the deal, saying it sets a worrying precedent. “The Chinese would pay a lot for F35s and advanced US military technology, too,” Harrell said in a post on X. “Regardless of whether you think Nvidia should be able to sell H20s in China, charging a fee in exchange for relaxing national security export controls is a terrible precedent.”
The deal could have significant revenue implications for both Nvidia and AMD, given their substantial presence in the Chinese market. China made up 13% of Nvidia’s revenues, generating $17 billion in revenue from China in the latest financial year. For AMD, China represented 24% of its revenue, with $6.2 billion in revenue from China in 2024.
The Trump administration has yet to decide how it would use the collected revenues, which could potentially be used to further US interests or support national security initiatives. However, the deal’s details, including when the 15% revenue-sharing arrangement will begin and how the funds will be collected, have yet to be determined.