US allows Nvidia, AMD AI chip sales to China for revenue cut
A notable shift in U.S. policy regarding advanced artificial intelligence chip sales to China appears to be underway, moving beyond strict national security imperatives toward a more financially integrated approach. According to reports, semiconductor giants Nvidia and AMD have reached an agreement with the U.S. government, consenting to remit 15% of the revenue generated from high-end AI chip sales in China. This arrangement facilitates the issuance of licenses, allowing these crucial technologies to reach the Chinese market.
Under the terms of this new understanding, Nvidia will share a portion of its earnings from the sale of its H20 AI chips in China, while AMD will do the same for its MI308 chips. Both companies have reportedly begun receiving the necessary licenses to proceed with these sales.
This development marks a significant evolution from previous administrations’ stances. The Trump administration, for instance, had imposed restrictions on certain high-performance AI inference chips destined for China in April, only to pause the ban a few months later. That pause coincided with Nvidia’s pledge of substantial data center investments, reportedly amounting to $500 billion, within the United States. Subsequently, in July, Nvidia announced it would resume sales of its H20 AI chips to China—a product line specifically engineered for the Chinese market in response to earlier restrictions imposed by the Biden administration.
An Nvidia spokesperson confirmed the company’s commitment to adhering to U.S. government regulations governing its global market participation. While acknowledging a hiatus in H20 shipments to China for several months, the spokesperson expressed optimism that export control policies would ultimately enable American companies to compete effectively in both Chinese and global markets.
U.S. Commerce Secretary Howard Lutnick has indicated that Nvidia’s shift in strategy is intertwined with broader trade discussions with China, particularly concerning rare-earth elements. These critical materials are indispensable for manufacturing a wide array of components, including rechargeable batteries vital for electric vehicles, highlighting the complex interplay between technology, trade, and geopolitical interests.
Despite the apparent economic rationale behind this new policy, it has not been without its detractors. National security experts and former government officials have voiced strong concerns, urging Secretary Lutnick to reconsider the decision. Their critiques underscore an ongoing debate within Washington about balancing commercial interests with strategic national security objectives in the rapidly evolving landscape of AI technology.