Nvidia and AMD to Share Revenue from Chip Sales to China with U.S. Government
In a significant move, Nvidia and AMD have agreed to pay 15% of their revenues from chip sales to China to the U.S. government. This arrangement is part of a deal that allows both companies to resume selling advanced semiconductors to China after the Trump administration had previously halted these sales due to national security concerns.
In April, the Trump administration paused the export of advanced computer chips to China, citing risks to national security. However, in July, it was announced that Nvidia and AMD could resume sales of certain chips used in artificial intelligence development—specifically the H20 and MI308 models.
President Trump confirmed the terms of this unusual deal during a press conference, noting that he initially sought a higher percentage—20%—of sales revenue. Trump praised Nvidia CEO Jensen Huang for negotiating it down to 15%, describing the chips being sold as “essentially old.”
While Nvidia did not go into detail about the deal, the company did state they would follow U.S. export rules. They emphasized the importance of adhering to government guidelines while also stressing that delays in exporting could negatively impact American competitiveness in global markets, particularly in technology.
Concerns regarding this new arrangement have been voiced from some lawmakers. Republican Rep. John Moolenaar expressed worries about the precedent this sets, suggesting that granting licenses for technology exports to China could enhance its AI capabilities, thus jeopardizing U.S. national security.
Democratic Rep. Raja Krishnamoorthi echoed these concerns, labeling the deal a misuse of export controls. He argued that U.S. export control measures should focus on genuine security rather than financial gain.
Experts have raised questions over the legality of this agreement. Derek Scissors, a senior fellow at the American Enterprise Institute, noted that this type of revenue-sharing arrangement could effectively resemble a tax, which is generally unconstitutional under current law. He warned that if this practice were to become standard, it might risk national security for the sake of raising funds.
Nvidia has previously claimed that strict export controls could lead to losses of up to $5.5 billion. They argue that tight regulations could push other countries to favor Chinese technology over American innovations.
This high-stakes issue is central to the ongoing competition in AI and technology between the U.S. and China, highlighting the delicate balance between fostering business opportunities and ensuring national security.
