US to Get 15% of AMD & NVIDIA China AI Chip Sales via New Deal
In an unprecedented move reshaping the landscape of global technology trade, U.S. chip giants Nvidia and Advanced Micro Devices (AMD) have agreed to pay the American government 15% of the revenue generated from their sales of high-end artificial intelligence (AI) chips to China. This highly unusual licensing deal, first reported by the Financial Times and subsequently confirmed by White House officials and company statements, allows the tech powerhouses to resume exports of their specialized AI processors, specifically Nvidia’s H20 and AMD’s MI308, into the lucrative Chinese market.
The agreement marks a significant pivot in the Trump administration’s approach to technology export controls, which had previously seen a halt in sales of these very chips to China in April 2025 due to national security concerns. These restrictions, building on earlier Biden-era policies, aimed to curb China’s access to advanced AI capabilities that U.S. officials feared could bolster its military advancements. While both the H20 and MI308 chips are considered less powerful, or “downgraded,” versions of their cutting-edge counterparts, designed by the companies specifically to comply with previous export limits, their sale was still blocked until this new arrangement.
The deal was reportedly brokered after a series of high-level discussions, including a recent meeting between Nvidia CEO Jensen Huang and President Donald Trump at the White House. During these negotiations, President Trump initially sought a 20% revenue share, ultimately settling for 15% following discussions with Huang. Licenses for the exports were issued just two days after this pivotal meeting.
For Nvidia and AMD, regaining access to the Chinese market is of immense financial importance. Prior to the April ban, Nvidia had already incurred substantial charges, reporting $4.5 billion in excess H20 inventory in a single quarter, underscoring the severe impact of the restrictions. China represents a critical market for both companies, with combined sales in the region projected to exceed $25 billion, making the prospect of re-entry, even with reduced profit margins, a compelling one. Nvidia stated its commitment to adhering to U.S. government rules for its global market participation, expressing hope that export controls will allow America to compete effectively in China and worldwide.
However, the nature of this agreement has drawn considerable scrutiny and criticism. Experts across national security, economics, and legal fields have described the revenue-sharing model as “highly unusual” and “unprecedented,” noting that export licenses traditionally do not carry such fees. Some legal scholars have even raised concerns about its potential unconstitutionality, likening the payment to an export tax. Critics argue that placing a price on national security sets a dangerous precedent and could undermine the integrity of export control regimes designed to protect strategic interests. Representative Raja Krishnamoorthi, a leading Democrat on a House panel focusing on competition with China, voiced concerns, calling it a “dangerous misuse of export controls that undermines our national security.” Meanwhile, China has also weighed in, previously accusing Washington of using technology trade measures to “maliciously contain and suppress China,” and raising its own security concerns over potential “backdoors” in Nvidia’s H20 chips, claims Nvidia denies.
While the Trump administration defends the agreement by asserting that the chips are less advanced and that the deal strengthens U.S. tech dominance, the long-term implications for U.S.-China technology competition remain uncertain. The administration has yet to clarify how the collected funds from this revenue-sharing arrangement will be utilized. Furthermore, President Trump has hinted at the possibility of future negotiations regarding even more advanced Nvidia chips, suggesting a willingness to consider allowing sales of a “somewhat enhanced – in a negative way – Blackwell” chip, indicating that the landscape of AI chip exports to China may continue to evolve under this new, transactional framework.