US Demands 15% of NVIDIA, AMD China AI Revenue

In an unprecedented move reshaping the landscape of global technology trade, chip giants NVIDIA and AMD have reportedly agreed to hand over 15% of their artificial intelligence (AI) chip revenue from China directly to the U.S. government. This extraordinary arrangement serves as a prerequisite for obtaining export licenses, allowing the companies to resume sales of their advanced AI accelerators, such as NVIDIA’s H20 and AMD’s MI308 chips, to the lucrative Chinese market.

The agreement marks a significant departure from traditional U.S. export control policies, which have historically focused on national security concerns rather than direct financial remuneration to the government. While national security remains a stated motivation, with Washington aiming to maintain its sovereignty in AI by restricting China’s access to cutting-edge hardware, the inclusion of a revenue-sharing clause introduces a new dimension of financial motivation. This mechanism is reportedly part of President Donald Trump’s broader strategy to secure tangible economic benefits in exchange for trade concessions.

The reported deal comes after a period of escalating restrictions. The Trump administration had, in April 2025, halted sales of key AI chips to China, including the H20 and MI308, citing security risks. This followed previous clampdowns by the Biden administration, which began in 2022 and saw NVIDIA developing downgraded chips like the H20 specifically to comply with export rules. The recent reversal of the ban, contingent on the revenue share, has been met with a mix of relief from the companies and skepticism from experts.

Both NVIDIA and AMD have navigated a challenging environment due to these fluctuating policies. AMD reported an $800 million charge in the second quarter related to restrictions on its AI chip sales to China, while NVIDIA anticipated an $8 billion hit from export limitations. The new agreement, while imposing a direct cost, reopens access to a critical market. NVIDIA’s China revenue alone reached approximately $17 billion in the last fiscal year, with AMD bringing in about $6.2 billion. The 15% levy means billions could flow into the U.S. Treasury, with estimates suggesting NVIDIA’s share could be as much as $2.25 billion annually.

However, the unprecedented nature of this “export tax” has drawn sharp criticism. Legal scholars and former government officials have raised concerns about its constitutionality, suggesting it may violate prohibitions on taxes on exports. Peter Harrell, a former White House senior director for international economics, described the policy as having “policy problems” and being potentially unconstitutional. Christopher Padilla, a former top export control official, echoed these fears, calling the deal “unprecedented and dangerous.”

For the companies, while the deal offers a lifeline to resume sales, it also introduces a new layer of political risk and a direct hit to profit margins. NVIDIA has stated that it “follows rules the U.S. government sets for our participation in worldwide markets” and hopes that export controls will still allow America to compete globally. AMD has confirmed that its license applications for China exports have been approved.

Beyond the immediate financial implications, this agreement signals a profound shift in the ongoing technological rivalry between the U.S. and China. It transforms geopolitics into a direct driver of corporate earnings and market leadership, creating a blueprint for how governments might monetize strategic technology sectors. While the U.S. aims to secure its AI dominance, this policy could also inadvertently weaken its arguments for export restrictions and complicate efforts to align with allies on technology control. Meanwhile, China continues to accelerate its domestic chip production, with manufacturers like Huawei steadily increasing their market share, potentially narrowing the long-term revenue window for U.S. companies. The deal buys time, but certainly not certainty, in a rapidly evolving global tech landscape.