Trump Imposes 15% 'Export Tax' on Big Tech's China AI Chips
In an unprecedented move that has sent ripples through the global business community, semiconductor giants Nvidia and AMD have reportedly agreed to remit 15% of their revenue from specialized chip sales in China directly to the U.S. government. This unconventional arrangement, effectively a novel “export tax,” marks the end of a months-long blockade, reopening one of the world’s largest markets for America’s two most valuable chipmakers.
The deal, first reported by the Financial Times, underscores the transactional and often unorthodox tactics employed by the Trump administration to generate federal revenue and exert control over the flow of strategic technologies. Nvidia and AMD’s advanced chips are foundational to the burgeoning artificial intelligence sector, highly sought after by companies and governments worldwide for training their sophisticated AI models.
For both Nvidia and AMD, consenting to this substantial revenue share was framed as the lesser of two evils. A complete exclusion from the lucrative Chinese market would have constituted a financial catastrophe. Nvidia, in particular, had borne the brunt of previous restrictions. After the administration blocked its China-specific chips in April, the company was forced to take a $4.5 billion charge for excess inventory it could no longer sell. Furthermore, in May, it warned investors that the ongoing restrictions could slash its revenue by an estimated $8 billion for the full fiscal year. Faced with the prospect of such colossal losses, surrendering 15% of future sales emerged as a pragmatic, albeit costly, compromise.
This standoff represents the latest chapter in the protracted U.S.-China tech rivalry, a geopolitical struggle where Washington has consistently sought to impede Beijing’s military advancements by restricting its access to cutting-edge AI chips. Following the previous administration’s ban on their most powerful processors, Nvidia and AMD had ingeniously developed specialized, less-powerful “compliance chips”—such as Nvidia’s H20 and AMD’s MI308—specifically tailored for the Chinese market to navigate export controls. However, in April, the Trump administration significantly tightened these screws, mandating a special license for the sale of even these downgraded chips. This escalation triggered months of intense, high-stakes lobbying, highlighted by multiple visits to the White House by Nvidia CEO Jensen Huang, ultimately culminating in the current groundbreaking agreement.
For the Trump administration, the deal is a multifaceted victory. It establishes a new stream of federal revenue that could help finance the ambitious tax cuts outlined in “One Big Beautiful Bill,” the president’s signature legislative initiative. Concurrently, it allows the administration to project an image of firmness toward China while safeguarding the financial health of critical American corporations.
In a carefully worded statement to Gizmodo, an Nvidia spokesperson refrained from confirming the specific 15% figure but acknowledged the new operational reality. The statement affirmed Nvidia’s commitment to “follow rules the U.S. government sets for our participation in worldwide markets.” While noting that the company “haven’t shipped H20 to China for months,” the spokesperson expressed hope that “export control rules will let America compete in China and worldwide,” adding a stark warning: “America cannot repeat 5G and lose telecommunications leadership. America’s AI tech stack can be the world’s standard if we race.”
This novel arrangement radically departs from conventional trade policy, where governments typically encourage and often subsidize exports from their national champions to bolster trade balances. This new model, conversely, compels America’s most successful technology companies to pay for the very privilege of competing abroad. While it offers Nvidia a pathway to reclaim its dominant market position and potentially push its market capitalization beyond the unprecedented $5 trillion threshold, it simultaneously sets a startling precedent for how the U.S. government could exert unparalleled control over its most strategic industries in the future. AMD did not immediately respond to requests for comment regarding the agreement.