US Demands 15% Cut of Nvidia/AMD AI Chip Sales to China
The Trump administration has reportedly mandated that tech giants Nvidia and AMD pay a 15 percent commission on their artificial intelligence chip sales revenue to China. This unprecedented demand, a prerequisite for the companies to obtain licenses for these crucial shipments, could generate an estimated $2 billion annually for the U.S. government, according to reports from The New York Times and The Financial Times. The agreement was reportedly forged between Nvidia CEO Jensen Huang and President Donald Trump just days before the Commerce Department issued the necessary export permits.
The approved shipments include Nvidia’s H20 and AMD’s MI308, both specifically designed as less powerful versions of their cutting-edge AI graphics processors. These modified chips are engineered to adhere to stringent U.S. export regulations aimed at restricting China’s access to advanced technology. The deal marks a significant development after the Trump administration imposed restrictions on AI chip sales to China in April, leading both companies to confirm last month that they would resume shipments upon receiving the required licenses. Adding another layer of complexity, the Chinese government last week voiced concerns that Nvidia’s H20 chips might contain a “backdoor,” a claim that could further complicate the already delicate trade relationship.
Described as “highly unusual” by The New York Times, this commission arrangement aligns with a broader pattern of unconventional financial dealings and direct corporate intervention under the Trump administration. Past instances have included various attempts to generate revenue or exert influence, from leveraging lawsuits against educational institutions and negotiating with television networks to imposing unpredictable tariffs and engaging in more informal fundraising activities. This latest move also follows a recent threat from President Trump to levy a 100 percent tariff on semiconductors unless companies commit to relocating manufacturing facilities to the United States.
Such direct intervention into corporate affairs is not new for the administration. Earlier this year, President Trump reportedly considered breaking up Nvidia entirely, a plan that was seemingly averted after a concerted “campaign of flattery” from CEO Jensen Huang, which also led to the removal of certain AI chip export limitations. The administration has similarly proposed a joint venture that would grant the U.S. government 50 percent ownership of TikTok, and recently demanded the resignation of Intel’s new CEO, Lip-Bu Tan, citing his connections to China. This commission agreement underscores the Trump administration’s assertive, and often unorthodox, approach to leveraging economic policy and direct corporate engagement as instruments of national security and trade negotiation, particularly in the high-stakes realm of advanced technology.