Nvidia and AMD to Pay 15% of China AI Chip Sales Revenue to US Government

Nvidia, AMD may sell high-end AI chips to China if they pay US a cut | TechCrunch

The AI chip race narrative used to be about U.S. national security, but apparently now it's about tariffs: Nvidia and AMD have agreed to pay the U.S. government 15% of the revenue they make from sales of high-end AI chips to China in exchange for licenses to sell to those chips in the country, the Financial Times reported, citing anonymous sources. According to the FT's government source, Nvidia will share revenues from sales of its H20 AI chips in China, and AMD would share a cut of MI308 chip sales. The government has also started issuing licenses for the sale of the two companies' chips, the report said. The Trump administration in April had restricted sales of certain high-performance AI inference chips to China, but paused the ban a couple of months later, when Nvidia promised to make up to $500 billion worth of data center investments stateside. Then in July, the company said it would resume sales of its H20 AI chips to China, which it had designed specifically for sale in the country following restrictions by the Biden administration. According to U.S. Commerce Secretary Howard Lutnick, Nvidia's change of course was related to trade discussions with China regarding rare-earth elements, which are necessary for making components, like rechargeable batteries for electric vehicles. The administration's decision to approve the sale of Nvidia's H20 chips has its critics: national security experts and former government officials wrote to Lutnick last month, urging the government to reverse course.

Nvidia, AMD to Pay 15% of Revenue From China AI Chip Sales to US Government

Nvidia and AMD will soon begin paying 15% of revenue made from its AI chip sales to China directly to the US government. The unprecedented deal will see the two companies allowed to once again sell their AI-powered chips in China for the first time since April. The financial arrangement is a condition for export licenses to be reinstated for the Chinese market after the US government banned sales earlier this year due to security concerns. Details of the deal come from people familiar with the matter, speaking to the Financial Times and The New York Times. Nvidia told BBC News, "We follow rules the US government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." Nvidia didn't confirm or deny the specifics of the deal, and AMD has yet to publicly confirm its involvement. The White House has yet to comment on either deal. The same sources familiar with the matter said the US government is currently undecided on where to spend the extra money. The H20 chip was originally produced by Nvidia after the US imposed export restrictions to the Chinese market back in 2023, during the Biden administration. The chip is less powerful than the company's most advanced tech, and it was approved for sale in China at the time. Earlier this year, Trump's government then banned the sale of the N20 chip and AMD's rival called the MI308. In July, the US government then said it would be reinstating sales for Nvidia. However, the Trump administration didn't immediately reinstate the export licenses needed to allow for those sales. Nvidia's CEO, Jensen Huang, reportedly met with Present Trump last week. Part of that conversation appears to be a negotiation of the agreement of sharing 15% of revenue to the US government. The US government then allowed for export sales for the H20 from Friday, August 8. A group of security specialists sent a letter back in July after the government confirmed it would be reopening sales of the chips to China. The letter was issued by 20 security and economic experts, including former security officials from the Trump administration. It said, "Chips optimized for AI inference will not simply power consumer products or factory logistics; they will enable autonomous weapons systems, intelligence surveillance platforms, and rapid advances in battlefield decision-making." "By supplying China with these chips, we are fueling the very infrastructure that will be used to modernize and expand the Chinese military. The line between optimizing an online marketplace and optimizing military logistics does not exist in the Chinese system -- and we should not pretend otherwise." Nvidia responded to the letter saying, "The H20 helps America win the support of developers worldwide, promoting America's economic and national security. It does not enhance anyone's military capabilities, and the US government has full visibility and authority over every H20 transaction." It's unclear if any other companies are eyeing similar deals to AMD and Nvidia.

Report says US to charge Nvidia, AMD, 15% China export tax

Nvidia and AMD will reportedly be allowed to resume sales in China if they cough a license fee amounting to 15 percent of sales. Reports in The New York Times and Financial Times state folks familiar with the situation as saying Washington granted both chipmakers a license to sell into China last week, a decision that means both can legally resume sales of some modestly-powerful GPUs to the Middle Kingdom. The reports also say Nvidia and AMD both agreed to the unusual condition that they'll pay 15 percent of revenue earned from sales under the licenses to Washington. Governments often charge for business licenses, and some impose taxes that require companies that exploit natural resources such as minerals or fisheries to pay a percentage of their profits. The Register is not aware of a previous attempt to tax semiconductor exports to a single nation. Neither chipmaker has confirmed the arrangement, but Nvidia told the Financial Times it follows whatever trade rules the US sets. Nvidia has previously told markets that bans on sales to China cost it $10.5 billion in the first half of 2025, and AMD last week informed investors that it missed out on $800 million of revenue last quarter. If those figures hold steady, Washington could reap $900 million or more each quarter - and possibly plenty more as GPU sales accelerate. At the time of writing, the Trump administration appears not to have made any public statements on the arrangement, so the reason for the policy and any expected outcomes are unclear. However, Nvidia CEO Jensen Huang argued for lifting the ban on GPU sales to China on grounds that it would strengthen America's AI industry, and ensure it retains global primacy. Just how slugging two leading chipmakers with a substantial tax achieves the administration's goals is hard to guess. President Trump is known to relish his reputation as a deal-maker who always extracts concessions from those with whom he negotiates. Shares in AMD and Nvidia stayed flat over the weekend, likely because news of this arrangement broke deep into Sunday in the USA. ®

Selling AI Chips to China? Nvidia & AMD Agree Unusual 15% Fee | Explained

Nvidia Corp. and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from Chinese AI chip sales to the US government in a deal to secure export licenses, an unusual arrangement that may unnerve both US companies and Beijing. The arrangement reflects US President Donald Trump's consistent effort to engineer a financial payout for America in return for concessions on trade. His administration has shown a willingness to relax trade conditions like tariffs in return for giant investment in the US, as with Apple's pledge to spend $600 billion on domestic manufacturing. But such a narrow, select export tax has little precedent in modern corporate history. Our trade tsar Brendan Murray joins Stephen Carroll and Tom Mackenzie on Bloomberg Radio for more. (Source: Bloomberg)

US licenses Nvidia to export chips to China, official says

Aug 8 (Reuters) - The commerce department has started issuing licenses to Nvidia (NVDA.O), opens new tab to export its H20 chips to China, a U.S. official told Reuters on Friday, removing a significant hurdle to the AI bellwether's access to a key market. The U.S. last month reversed an April ban on the sale of the H20 chip to China. The company had tailored the microprocessor specially to the Chinese market to comply with the Biden-era AI chip export controls. The curbs will slice $8 billion off sales from its July quarter, the chipmaker has warned. Nvidia CEO Jensen Huang met with Trump on Wednesday, two sources familiar with the matter told Reuters. A spokesperson for Nvidia declined comment. A White House spokesman did not immediately respond to a request for comment. The company said in July it was filing applications with the U.S. government to resume sales to China of the H20 graphics processing unit, and had been assured it would get the licenses soon. It is unclear how many licenses may have been issued, which companies Nvidia is allowed to ship the H20s to, and the value of the shipments allowed. Nvidia disclosed in April that it expected a $5.5 billion charge related to the restrictions. In May, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. The Financial Times first reported Friday's developments. Nvidia said last month that its products have no "backdoors" that would allow remote access or control after China raised concerns over potential security risks in the H20 chip. BIG MARKET Exports of Nvidia's other advanced AI chips, barring the H20, to China are still restricted. Successive U.S. administrations have curbed exports of advanced chips to China, looking to stymie Beijing's AI and defense development. While this has impacted U.S. firms' ability to fully address booming demand from China, one of the world's largest semiconductor markets, it still remains an important revenue driver for American chipmakers. Huang has said the company's leadership position could slip without sales to China, where developers were being courted by Huawei Technologies [RIC:RIC:HWT.UL] with chips produced in China. In May, Nvidia said the H20 had brought in $4.6 billion in sales in the first quarter and that China accounted for 12.5% of overall revenue during the period. Reporting by Karen Freifeld, Arsheeya Bajwa in Bengaluru and Max A. Cherney in San Francisco; Editing by Alan Barona and Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia, AMD to pay 15% of China chip sale revenues to US, FT reports

Aug 10 (Reuters) - Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab have agreed to give the U.S. government 15% of their revenues from chip sales in China, under an arrangement to obtain export licenses for the semiconductors, the Financial Times reported on Sunday. The revenue share applies to Nvidia's H20 chips and AMD's MI308 chips, the report said, citing a U.S. official, noting that the Trump administration had yet to determine how to use the money. The chipmakers agreed to the arrangement as a condition for obtaining export licences for the Chinese market that were granted last week, FT reported. Nvidia follows rules the U.S. government sets for its participation in worldwide markets, an Nvidia spokesperson told Reuters in an emailed statement. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not immediately respond to a request for comment. The Commerce Department started issuing licenses to Nvidia to export its H20 chips to China last week, removing a significant hurdle to the artificial intelligence bellwether's access to a key market. The U.S. last month reversed an April ban on the sale of the H20 chip to China. The company had tailored the microprocessor specially to the Chinese market to comply with the Biden-era AI chip export controls. Reporting by Yazhini MV in Bengaluru; editing by Diane Craft and Richard Chang Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia, AMD to pay 15% of China chip sale revenues to US, official says

Aug 10 (Reuters) - Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab have agreed to give the U.S. government 15% of revenue from sales to China of advanced computer chips like Nvidia's H20 that are used for artificial intelligence applications, a U.S. official told Reuters on Sunday. U.S. President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia last month announced the U.S. said that it would allow the company to resume sales and it hoped to start deliveries soon. Another U.S. official said on Friday that the Commerce Department had begun issuing licenses for the sale of H20 chips to China. When asked if Nvidia had agreed to pay 15% of revenues to the U.S., a Nvidia spokesperson said in a statement, "We follow rules the U.S. government sets for our participation in worldwide markets." The spokesperson added: "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The U.S. Department of Commerce did not immediately respond to a request for comment. The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licences for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. Lutnick said it was in U.S. interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack." The U.S. official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising U.S. national security. The official did not know when the agreement would be implemented or exactly how, but said the administration would be in compliance with the law. Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticized the move. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said. Reporting by Karen Freifeld; additional reporting by Yazhini MV and Gnaneshwar Rajan in Bengaluru; Editing by Caroline Humer and Jamie Freed Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia, AMD to pay 15% of China chip sale revenue to US, official says

Aug 11 (Reuters) - Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab have agreed to give the U.S. government 15% of revenue from sales to China of advanced computer chips, a U.S. official said on Sunday, in an unusual move likely to faze American companies. U.S. President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia announced last month Washington had said it would allow the company to resume sales and it hoped to start deliveries soon. Another U.S. official said on Friday the Commerce Department had begun issuing licenses for the sale of H20 artificial intelligence chips to China. Both the U.S. officials declined to be named because details have not been made public. The new levy could also hurt margins for the two companies, analysts warned. Shares of Nvidia and AMD fell about 1% and nearly 2%, respectively, in premarket trade on Monday. The deal to pay the U.S. government from sales in China is unusual for a president, and marks Trump's latest intervention in corporate decision-making. Trump harangues company executives to invest in America to shore up domestic jobs and manufacturing, and last week, he demanded new Intel (INTC.O), opens new tab CEO Lip-Bu Tan immediately resign, calling him "highly conflicted" due to his ties to Chinese firms. The U.S. official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising national security. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" When asked if Nvidia had agreed to pay 15% of revenues to the United States, an Nvidia spokesperson said in a statement: "We follow rules the U.S. government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." Nvidia has warned that being unable to supply H20 chips to China could slice $8 billion off sales from its July quarter, while AMD had forecast a $1.5 billion hit to revenue this year owing to the curbs. AMD did not respond to a request for comment on the news that was first reported by the Financial Times earlier on Sunday. "The Chinese market is significant for both these companies so even if they have to give up a bit of the money, they would otherwise make it looks like a logical move on paper," AJ Bell investment director Russ Mould said. "That said, it is unprecedented and there is always the risk the revenue take could be upped or that the Trump administration changes its mind and re-imposes export controls." The U.S. Department of Commerce did not immediately respond to a request for comment. China's foreign ministry, approached for comment on Monday, said the country had repeatedly expressed its position on the issue of U.S. chip exports. The ministry in the past has accused the U.S. of using technology and trade issues to "maliciously contain and suppress China". The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. Lutnick said it was in U.S. interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack". The U.S. official who spoke about the 15% levy said they did not know when the agreement would be implemented nor exactly how, but said the administration would be in compliance with the law. Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticized the move. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13% of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24% of total revenue. Giving away some revenue from these chips to the U.S. government would bring the gross margins for these processors down by 5 to 15 percentage points, resulting in an impact of "a point or so" to their overall gross margins, Bernstein analysts said in a note. Reporting by Karen Freifeld. Additional reporting by Arsheeya Bajwa, Yazhini MV and Gnaneshwar Rajan in Bengaluru, Liam Mo and Che Pan in Beijing. Editing by Jamie Freed, Miyoung Kim, Mark Potter and Devika Syamnath Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nvidia's set to regain some China access. But it still faces eroding AI chip market share

Nvidia's H20 chips are likely to return to China, but tech experts don't expect them to be met with the same fanfare in the market in light of new competition and regulatory scrutiny. The Trump administration last month gave Nvidia assurances that it would be permitted to resume sales of its H20 chips to China, after their exports had been effectively banned in April. It also announced a new "fully compliant" made-for-China chip. The move was seen as a huge win for the company, which had flagged billions in losses due to the policy. But while the H20s might be returning to the Chinese market that doesn't mean Nvidia will regain its former market share, analysts caution. In a recent report, global equity research and brokerage firm Bernstein forecast that Nvidia's AI chip market share in China would drop to 54% in 2025, from 66% the year prior. This drop is only partly owed to complications with resuming chip supply, as Chinese AI chipmakers have been seizing more of the booming domestic market. "U.S. export controls have created a unique opportunity for domestic AI processor vendors, as they are not competing with the most advanced global alternatives," Bernstein's report said, noting growing prominence of Chinese players such as Huawei, Cambricon and Hygon. "The localization ratio of China's AI chip market will surge from 17% in 2023 to 55% by 2027." Other analysts such as The Futurum Group CEO Daniel Newman were more bullish about Nvidia's bounce back in China. However, he also flagged potential market share erosion from Nvidia customers that might have found success with Chinese rivals while the H20 controls were in place. It's also worth noting that Bernstein's predictions assume that broader U.S. chip restrictions will remain largely unchanged. That creates a dynamic where Chinese companies continue to develop and offer advanced chips, possibly eroding demand for outdated U.S. offerings.

NVIDIA may give US government a cut of its profits to sell AI chips to China

The debate over whether AI chipmakers should be allowed to sell their products to China has taken an unusual turn. The US government has reportedly given NVIDIA and Advanced Micro Devices (AMD) permission to make the sales but for one big catch: 15 percent of the sales. The news was first reported by The Financial Times, which cited multiple people familiar with the agreement. In July, NVIDIA announced that the US government would approve export licenses to sell its H20 AI GPUs after blocking their sale in April. NVIDIA created these specific chips -- which are less powerful than ones sold in the US -- in response to restrictions on sales to China. It previously developed the A800 and H800 chips for the Chinese market, but those were also banned. Now, NVIDIA and AMP were both reportedly granted export licenses for China last week, after agreeing to give the government 15 percent of their profits. AMP will provide the share from sales of its MI308 chip. There's significant debate over whether selling AI chips to China will endanger US national security. At the end of July, 20 national security experts and past government officials -- including President Trump's former deputy national security advisor, Matt Pottinger -- wrote a letter to Howard Lutnick, the US Secretary of Commerce, stating as much. The signatories "believe this move represents a strategic misstep that endangers the United States' economic and military edge in artificial intelligence." They worry it will restrict the number of chips available for the US and be used by China's military, among other concerns. NVIDIA disagrees, claiming the export licenses will allow it to compete with Chinese businesses.

Nvidia, AMD to pay 15% of China chip sale revenue to U.S. government

NEW YORK (AP) -- Nvidia and AMD agreed to share 15% of their revenues from chip sales to China with the U.S. government, a U.S. government official has confirmed. President Donald Trump's administration had halted the sale of advanced computer chips to China back in in April, but Nvidia and AMD revealed in July that Washington would allow them to resume sales of the H20 and MI308 chips, which are used in artificial intelligence development. The official, who insisted on anonymity to discuss a policy not yet formally announced, confirmed to The Associated Press the revenue sharing terms of the deal, and said the broad strokes of the initial report by The Financial Times were accurate. The FT reports that Nvidia and AMD agreed to the financial arrangement as a condition for obtaining export license to resume sales to China. "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," Nvidia wrote in a statement to the AP. "America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race." AMD did not immediately reply to a request for comment. Restrictions on sales of advanced chips to China have been central to the AI race between the world's two largest economic powers, but such controls are also controversial. Proponents argue that these restrictions are necessary to slow China down enough to allow U.S. companies to keep their lead. Meanwhile, opponents say the export controls have loopholes -- and could still spur innovation. The emergence of China's DeepSeek AI chatbot in January particularly renewed concerns over how China might use advanced chips to help develop its own AI capabilities.

What Trump's Nvidia and AMD China deal means for the world

U.S. President Donald Trump (L) listens as Nvidia CEO Jensen Huang speaks in the Cross Hall of the White House during an event on "Investing in America" on April 30, 2025 in Washington, DC. Nvidia and AMD have agreed to share some of their revenue from sales to China with the U.S. government, according to several reports, sparking debate about whether the move could impact the chip giants' business and whether Washington might seek out similar deals. In exchange for 15% of revenues from the chip sales, the two semiconductor firms will receive export licenses to sell Nvidia's H20 and AMD's MI308 chips in China, according to the Financial Times. "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," Nvidia said in a statement to NBC News. "America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race." CNBC has reached out to AMD and the White House for comment. The arrangement crafted by U.S. President Donald Trump's administration is "unusual", analysts told CNBC, but underscores the transactional nature of the current White House leader. Meanwhile, investors see the move as broadly positive for both Nvidia and AMD, which once more secure access to the Chinese market.

Nvidia Just Dodged an $8 Billion Bullet, Thanks to Donald Trump

After months of high-stakes diplomacy and a personal plea to the president, the AI giant has secured a crucial license to sell its specialized chips in China. It's a major victory for the world's most valuable company in the ongoing tech war. The Trump administration has reportedly granted Nvidia a license to resume selling its specialized AI chips to the lucrative Chinese market, a decision that follows months of high-stakes lobbying and direct appeals to the White House by CEO Jensen Huang. The move is a massive financial relief for the AI giant. It allows Nvidia to avoid a projected $8 billion revenue shortfall for the fiscal year and re-enter a market that Huang himself estimates will be worth $50 billion in the coming years. According to the Financial Times, the breakthrough came after Huang’s visit to the White House on August 6 to meet with President Donald Trump. Just two days later, the Commerce Department, which oversees export controls, reportedly issued the first licenses for Nvidia to sell its H2O chips in China. This decision is the latest chapter in the ongoing U.S.-China tech war. The core issue is the fear that advanced American technology could be used by Beijing to develop sophisticated military AI. To prevent this, the U.S. has imposed strict export controls, blocking the sale of top-tier AI chips to China. Nvidia’s most powerful processors, like its Blackwell series, are banned for export to China. In response, Nvidia cleverly designed the H2O chip, a less-powerful version of its advanced technology, specifically tailored to comply with the original export rules. However, the Trump administration took an even tougher stance in April, banning the sale of even these de-powered H2O chips. The move sent shockwaves through Nvidia. The company was forced to halt shipments, resulting in a $4.5 billion charge for excess inventory and purchase obligations. In May, Nvidia warned investors that the restrictions would cost the company an estimated $8 billion in revenue for the full fiscal year. Reversing this policy took months of intense diplomacy and lobbying, culminating in Huang's personal visits to the White House. The CEO's charm offensive appears to have worked, drastically changing President Trump's perspective on the company. During a White House AI summit last month, Trump admitted he had initially considered taking antitrust action against the chip giant before he got to know its CEO. “I said, â€~Look, we’ll break this guy up,’ before I learned the facts of life,†Trump said of Huang during a speech. “I said, â€~Who the hell is he? What’s his name? What the hell is Nvidia? I’ve never heard of it before.’†The president continued, “Then I got to know Jensen, and now I see why,†inviting Huang, who was in the audience, to stand up. That meeting appears to have been the turning point, convincing the administration that protecting Nvidia’s financial health was crucial for maintaining America's lead in the global AI race. For Nvidia, the news is a massive relief. The company, which last month became the first to reach a $4 trillion market value, is now hovering around $4.45 trillion. With the $8 billion revenue threat now averted and the $50 billion China market reopened, investors will be watching closely when Nvidia reports its quarterly earnings later this month. Another strong report could easily push the AI titan past the unprecedented $5 trillion threshold. Nvidia and the Commerce Department did not immediately respond to requests for comment.

Nvidia and AMD agree to pay 15% of China chip sales to U.S. government

The arrangement is highly unusual as U.S. tech export controls are usually based on national security imperatives rather than whether they can raise funds for Washington. U.S.-based chipmakers Nvidia and AMD have agreed to pay the United States 15 percent of their revenue from chip sales in China as a prerequisite to obtaining export licenses for the country, according to two people familiar with the matter who spoke on the condition of anonymity as they were not authorized to discuss the matter in public. Nvidia issued a statement after the Financial Times first reported the arrangement, which one of the people characterized as unprecedented. "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," said the statement, attributed to an Nvidia spokesperson, which referred to the company's sought-after H20 artificial intelligence chips. "America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race," the Nvidia statement continued. The arrangement is highly unusual, with U.S. technology export controls traditionally based on national-security imperatives, without consideration of whether the U.S. government can raise funds from the policies. The U.S. government had previously restricted the chip sales, saying it was necessary to prevent Beijing from building supercomputers and using advanced AI for military purposes. Nvidia announced last month that the U.S. government had reversed its ban and was allowing the company to sell the H20 chips to China. AMD and the White House did not immediately respond to requests for comment. This is a developing story and will be updated.

Nvidia and AMD reportedly agree to pay 15% of China chip sale revenues to US

Chipmakers agree to quid pro quo deal as condition for obtaining export licenses for Chinese market, FT reports Nvidia and AMD have agreed to give the US government 15% of their revenues from chip sales in China, under an unprecedented arrangement to obtain export licenses for the semiconductors, the Financial Times reported on Sunday. The revenue share applies to Nvidia's H20 chips and AMD's MI308 chips, the report said, citing a US official, noting that the Trump administration had yet to determine how to use the money. The chipmakers agreed to the quid pro quo arrangement as a condition for obtaining export licenses for the Chinese market that were granted last week, according to the unnamed official. According to export control experts, no US company has ever agreed to pay a portion of their revenues to obtain export licenses, the newspaper reported. But Donald Trump has encouraged firms, and countries, to make investments in the US to, in his words, "buy down" the tariff rates he imposes. Nvidia follows rules the US government sets for its participation in worldwide markets, an Nvidia spokesperson told Reuters in an emailed statement. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not immediately respond to a request for comment. The US commerce department started issuing licenses to Nvidia to export its H20 chips to China last week, removing a significant hurdle to the artificial intelligence bellwether's access to a key market. The US last month reversed an April ban on the sale of the H20 chip to China. The company had tailored the microprocessor specially to the Chinese market to comply with the Biden-era AI chip export controls.

15% of Nvidia and AMD China chip sales to go to US government - new export licenses subject to 'unprecedented' sales tariff despite 'national security problem'

No additional measures have been made to address national security threats The US government has reversed a ban on the sale of Nvidia's H20 chip and AMD's MI308 chip to China under the condition that 15% of the revenue is paid to the US government. The Trump administration expanded efforts to curb China's ability to obtain powerful chips used to develop AI models by expanding Biden-era sanctions to an outright ban on the sale of the processors. Many security experts, including those working under the Trump administration, have warned the government the sale of powerful processors to China will help it to expand both its consumer and military AI efforts to surpass the US. The Nvidia H20 and AMD MI308 processors were developed to comply with Biden administration restrictions on AI processing chips that could be sold in China. Restrictions were imposed on the sale of powerful AI chips to China due to national security concerns surrounding the development of AI models for the People's Liberation Army. Trump banned the sale of these chips to China following a trade spat in April 2025, and then reversed the ban in July. Now, seeing the apparent worth of the sales and hoping to cash in, the Trump administration is issuing a 15% revenue cut for itself. Speaking to the BBC, Nvidia said, "We follow rules the US government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." Whether this 15% revenue cut will be passed on to the Chinese market by Nvidia and AMD remains to be seen. But the elephant in the room still remains. What happened to the national security problem? Deborah Elms, head of trade policy at the Hinrich Foundation, said "You either have a national security problem or you don't. If you have a 15% payment, it doesn't somehow eliminate the national security issue." Despite sanctions and trade bans, China has still managed to import powerful AI processing chips through loopholes and third-parties, and is likely using the chips to train AI systems to be used for military purposes. 20 security experts wrote a letter to US Commerce Secretary Howard Lutnick advising against the sales of the chips to the Chinese market, adding that even though the majority of the buyers would be civilian companies, the chips would still be used by China's military. "Chips optimized for AI inference will not simply power consumer products or factory logistics; they will enable autonomous weapons systems, intelligence surveillance platforms and rapid advances in battlefield decision-making," the letter said. Charlie Dai, vice president and principal analyst at global research firm Forrester called the deal "unprecedented," further stating that, "The arrangement underscores the high cost of market access amid escalating tech trade tensions, creating substantial financial pressure and strategic uncertainty for tech vendors."

Nvidia, AMD exports to China will reportedly face 15% fee

Why it matters: While export controls for sensitive products are nothing new, charging a company 15% of its revenue to sell a particular product to a particular country would be unprecedented. Driving the news: The two chip companies agreed to the fee structure last week, the FT reported, citing a U.S. government official and other people familiar with the matter. * It was not immediately clear how the government would deploy the presumed billions of dollars in fees collected, the outlet said. * The deal applies specifically to Nvidia's H20 chip and AMD's MI308, both crucial to AI applications, the FT added. For the record: "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," Nvidia said in a statement in response to the FT report. * Neither AMD nor the White House immediately responded to Axios' requests for comment on Sunday evening. What to watch: Just how much the deal ends up being worth.

Nvidia and AMD will reportedly pay 15% of their Chinese revenue to the US government so they can sell AI-capable chips there, despite warnings from security experts

According to the Financial Times, Nvidia and AMD have joined together in an unprecedented trade agreement that will see them pay the US government 15% of revenue from their chip sales in China. In return, the two tech giants will gain the export licenses they need to sell semiconductors in the Chinese Market. It's specifically Nvidia's H20 chips and AMD's MI308 they're looking to sell, and which the 15% tariff will be paid on. The H20 chip has been controversial, and was the cause of former President Joe Biden instituting export controls on advanced chips that could be used for artificial intelligence. One US politician went so far as to suggest adding trackers that would brick chips that ended up in China. As the Financial Times reports, "US security experts say the H20 will help the Chinese military and undermine US strength in artificial intelligence." Nvidia responded to call these claims "misguided". A Commerce Department adviser for the Biden administration, Alasdair Phillips-Robins, was quoted by Reuters as saying, "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury". There was talk of banning exports of H20 chips to China from the Trump administration back in April. They came to nothing, however, after Nvidia's CEO Jensen Huang met with President Donald Trump personally in June. Trump, who admitted he hadn't even heard of Nvidia previously, quickly became Huang's biggest fan. Speaking at an AI summit in July, Trump called Huang a "great guy" and claimed he had 100% market share and Nvidia was impossible to catch up to. Nvidia's Chinese revenue last year came to $17 billion, which was 13% of its total sales. AMD numbers from 2024 show it earning $6.2 billion in revenue from China, which came to 24% of its total revenue.

Chipmakers Nvidia and AMD to pay 15% of China revenue to US government

The unprecedented deal is part of a bargain to secure US export licenses for the Chinese market. Nvidia and AMD have agreed to pay 15% of their revenues from sales of artificial-intelligence chips in China to the US government. The unprecedented deal, first reported by the Financial Times on Sunday, is part of a bargain to secure export licenses for the Chinese market. Nvidia will share revenue from sales of its H20 chip, while the pledge applies to AMD's MI308 chips. According to FT sources, the Trump administration has not yet decided how to use the money. "The unusual arrangement is another example of a mega tech company acquiescing to the US administration's demands, to gain an upper hand as trade relations are redrawn," said Susannah Streeter, head of money and markets at Hargreaves Lansdown. "Nvidia's Q1 revenue took a $2.5 billion (€2.1bn) hit due to restrictions on H20 sales to China, but it clearly believes the 15% contribution is well worth it, to keep access to the vast and fast developing market," she added. The US government last week began to grant licenses for Nvidia to sell its H20 chip in China. The move represented a U-turn for the White House, which in April banned sales of the chip to China, linked to concerns that the technology could be used for military purposes. The H20 chip was specifically designed for the Chinese market, in line with restrictions introduced by former president Joe Biden in 2023. Huang had harshly criticised April's export ban, arguing that restrictions were causing more harm to American businesses than to China. Critics argued that as well as denting the profits of US firms, restricting access to the Chinese market provided an added incentive for China's domestic industry to innovate. The new pledges from AMD and Nvidia are unusual, as no US company has ever agreed to pay a portion of their revenues to obtain export licences. Even so, this brand of dealmaking is becoming increasingly characteristic of firms dealing with the Trump administration. The president is notably encouraging companies to invest in the US to obtain more favourable tariff rates. Last week, Apple said it would invest another $100bn (€85.8bn) in the country, adding to a previous pledge to spend $500bn (€429bn) in the US over the next four years. The announcement came as President Trump said he would impose a 100% tariff on computer chips, only sparing companies that commit to "building" on US soil. The easing of chip export restrictions has also arrived as relations between Washington and Beijing have thawed in recent weeks. Earlier this year, the Trump administration threatened a 145% duty on Chinese goods sent to the US, and Beijing responded with a 125% retaliatory tariff. The two sides decided to lower these taxes in May, and then agreed on a trade framework in June. Both China and the US are seeking to find a permanent solution to replace the temporary trade truce before a 12 August deadline. Nvidia and AMD did not immediately respond to Euronews' request for comment.

Nvidia, AMD agree to pay US 15% of revenue from sales of AI chips to China

Nvidia chief executive Jensen Huang met with US President Donald Trump at the White House last week and agreed to give the US government a 15 percent cut of Nvidia's revenues from chip sales to China, according to media reports Sunday. The US has been restricting which chips Nvidia and its US rival AMD can export to China on national security grounds. US semiconductor giants Nvidia and Advanced Micro Devices have agreed to pay the United States government 15 percent of their revenue from selling artificial intelligence chips to China, according to media reports Sunday. Nvidia CEO Jensen Huang met with US President Donald Trump at the White House on Wednesday and agreed to give the federal government the cut from its revenues, a highly unusual arrangement in the international tech trade, according to reports in the Financial Times, Bloomberg and New York Times. AFP was not able to immediately verify the reports. Investors are betting that AI will transform the global economy, and last month Nvidia - the world's leading semiconductor producer - became the first company ever to hit $4 trillion in market value. The California-based firm has, however, become entangled in trade tensions between China and the United States, which are waging a heated battle for dominance to produce the chips that power AI. The US has been restricting which chips Nvidia can export to China on national security grounds. Read moreNvidia says no 'backdoors' in chips as China questions security Nvidia said last month that Washington had pledged to let the company sell its "H20" chips to China, which are a less powerful version the tech giant specifically developed for the Chinese market. The Trump administration had not issued licenses to allow Nvidia to sell the chips before the reported White House meeting. On Friday, however, the Commerce Department started granting the licenses for chip sales, the reports said. Silicon Valley-based Advanced Micro Devices (AMD) will also pay 15 percent of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country. The deal could earn the US government more than $2 billion, according to the New York Times report. The move comes as the Trump administration has been imposing stiff tariffs, with goals varying from addressing US trade imbalances, wanting to reshore manufacturing and pressuring foreign governments to change policies. A 100 percent tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the United States.

Nvidia, AMD agree to pay US 15pc from chip sales to China

The license comes after the Nvidia CEO met with US president Donald Trump for the second time in weeks. Nvidia and Advanced Micro Devices (AMD) have agreed to pay the US government 15pc of the revenue generated from chip sales in China, in a bid to obtain export licences for the semiconductors. Sources told news publications that the deal was agreed as a condition for obtaining export licences for the Chinese market that was issued to the two companies last week. The 15pc revenue-sharing agreement will be applied to Nvidia's H20 chips and AMD's MI308 chips. The license issuance comes after Nvidia CEO Jensen Huang met with US president Donald Trump and policymakers at Washington for the second time in weeks. Huang was assured in his July meeting with the president that export licences for H20 chips will be granted to restart sales in China. However, that had not materialised until the CEO met with Trump again last Wednesday (6 August), with licenses finally being granted that Friday (8 August). The US government also started issuing licenses to AMD, which reported that it lost $800m this past quarter stemming from export restrictions on its MI308 chips. Estimates suggest that without the chip curbs in place, Nvidia would have generated around $23bn in H20 chip sales to China in 2025. Although, in a recent report, global equity research firm Bernstein forecast that the company's AI chip market share in China would drop from 66pc to 54pc - partly owning to complications with resuming chip supply, as well as with domestic chipmakers in the country taking up the temporary space left by Nvidia. Nvidia, AMD and Intel were hit with US license controls on AI chip exports to China in April. This was despite the fact that Nvidia tailored its H20 chips for China, creating a cheaper and less advanced version for the market at the behest of the US government. The H20 was introduced following Washington's export control measures in 2023, which imposed restrictions on compute and speeds for AI processors. No US company has ever agreed to pay a portion of their revenue to obtain export licenses, the Financial Times reports. However, the deal follows a similar tune to the Trump administration's previous moves, where the president threatens tariffs - the latest being 100pc on chips - if companies do not promise domestic investments. Responding to the financial publication, Nvidia said, "We follow rules the US government sets for our participation in worldwide markets." Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

NVIDIA & AMD to Now Pay 15% of China Sale Revenue to the US | AIM

"We hope to continue to cooperate with China," Jensen Huang had said previously. US chipmakers NVIDIA and AMD recently received permission to sell their H20 and MI308 AI chips to China, respectively, amid tightened export controls. According to the latest reports, companies will now allocate 15% of their revenue from sales of these advanced chips to the US government. The agreement follows the Donald Trump administration's decision in April to halt H20 chip sales to China. By early 2025, Chinese firms reported severe shortages, and NVIDIA had warned of a potential $5.5 billion hit to its bottom line. Notably, last month, the administration allowed both NVIDIA and AMD to resume sales after obtaining export licences. NVIDIA had also announced the RTX PRO GPU, a China-specific chip engineered to comply with US regulations. The RTX PRO joins the H20 and

Nvidia and AMD to pay Trump administration 15% of chip revenue for export licences to China

Paying the government to allow export licences for previously banned export semiconductors is said to be unprecedented. Two major US microchip makers have agreed to pay the Trump administration a portion of sales in return for export licences to send chips to China, according to reports. The world's most valuable company, Nvidia, and Advanced Micro Devices (AMD) will give 15% of Chinese sales of two AI-powering microchips to the US government. Such an agreement is said to be unprecedented, according to reporting in the Financial Times. Money blog: Sainsbury's defends 25% meal deal hike The companies are reported by the paper to have been issued licences to export the semiconductors to the world's second largest economy after a change of course by the Trump government in June. Semiconductors are found in nearly all electronic technology and are vital to powering the modern world. Previously export of ones, such as the H20 and MI308 produced by Nvidia and AMD respectively, had been banned under US national security grounds. But successful lobbying by Nvidia's chief executive Jensen Huang meant Trump allowed for resumed sales in China. Having China reliant on US technology, rather than needing to develop its own, was seen to be better for America by the administration. Nvidia's H20 chip was designed with the Biden administration's export crackdown on advanced artificial intelligence (AI) powering chips in mind. In April, President Trump's government said it would ban export of the H20. The companies have been contacted for comment. Nvidia told other news outlets, "We follow rules the US government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership."

U.S. Government to Take Cut of Nvidia and AMD AI Chip Sales to China

SAN FRANCISCO -- Nvidia and Advanced Micro Devices are expected to pay the United States 15% of the money they take in from selling artificial intelligence chips to China, as part of a highly unusual financial agreement with the Trump administration. The deal, which was described by three people familiar with the agreement who spoke anonymously because they didn't have permission to discuss it publicly, comes a month after Nvidia received permission to sell a version of its artificial intelligence chips to China. While the Trump administration publicly said a month ago that it was giving the green light to Nvidia to sell an AI chip called H20 to China, it did not actually issue the licenses making those sales possible. On Wednesday, Nvidia CEO Jensen Huang met with President Donald Trump at the White House and agreed to give the federal government its 15% cut, essentially making the federal government a partner in Nvidia's business in China, said the people familiar with the deal. The Commerce Department began granting licenses for AI chip sales two days later, these people said. Though Huang has led negotiations with the White House, Nvidia isn't the only company that sells AI chips to China. AMD has an AI chip called the MI308 and in April the Trump administration also banned sales of it to the Chinese. There are few precedents for the Commerce Department agreeing to grant licenses for exports in exchange for a share of revenue. But the unorthodox payments are consistent with Trump's increasingly interventionist role in international business deals involving U.S. companies. In June, the administration approved investment by Nippon Steel, a Japanese company, in U.S. Steel in a deal that included a so-called golden share in the company, a rarely used practice where the government takes a stake in a business. The administration is also using tariffs as a stick to bring manufacturing to the United States. Last week, Trump said tech companies would have to pay a 100% tariff on semiconductors made abroad, unless they invested in the United States. The deal agreed to last week could funnel more than $2 billion to the U.S. government. Nvidia was expected to sell more than $15 billion worth of its H20 chip to China through the end of the year, and AMD was expected to sell $800 million, according to Bernstein Research. The Commerce Department, White House and AMD didn't provide comment Sunday. Ken Brown, a spokesperson for Nvidia, said the company follows the U.S. government's rules for sales abroad. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," he said. The deal to license AI chips caused immediate outcry among national security experts who have been opposed to AI chip sales to China. They worry that the Trump administration's decision to leverage export licenses for money will encourage Beijing to pressure other companies to make similar arrangements to loosen restrictions on other technology, such as semiconductor manufacturing tools and memory chips. "This is an own goal and will incentivize the Chinese to up their game and pressure the administration for more concessions," said Liza Tobin, who previously served as China director at the National Security Council during the Trump and Biden administrations. "This is the Trump playbook applied in exactly the wrong domain. You're selling our national security for corporate profits." The Financial Times earlier reported on the deal between the chipmakers and the Trump administration. Clearing the way for selling AI chips to China was a dramatic about-face by the Trump administration, which banned their sales to China in April. The administration restricted exports of those chips because of concerns that the technology could be used to close the gap between the United States and China in the development of artificial intelligence. The administration's reversal on AI chip sales has been divisive because it has major implications for the race between the two countries to develop AI. Nvidia's chips are regarded as ideal for running some calculations that power AI and have better performance than those offered by its Chinese rival, Huawei. The Trump administration has said that it will continue to prevent China from buying Nvidia's most advanced chips. It has said that the H20 chip, which was made specifically for China and was approved for sale by the Biden administration, is less powerful than the chips the company sells to U.S. businesses and allies. "We don't sell them our best stuff, not our second-best stuff, not even our third-best," Commerce Secretary Howard Lutnick said during an appearance on CNBC last month. He said the goal was to stay one step ahead of China, so it would keep buying U.S. chips. Huang persuaded Trump to approve AI chip sales by arguing that preventing them would only hurt U.S. tech companies. He has said a ban would allow Huawei to dominate sales of AI chips in China, the world's largest semiconductor market, and pump the money it makes into research and development to close the gap with Nvidia, AMD and others. Instead, he urged Trump to let Nvidia and AMD compete for those sales, so that they can use the money they make there to build their businesses. "The American tech stack should be the global standard, just as the American dollar is the standard by which every country builds on," Huang said during a podcast recorded in July with the Special Competitive Studies Project, a think tank. But many national security officials focused on China disagree. In July, two former national security officials in the Trump administration, Matt Pottinger and David Feith, and 18 other people with a mix of national security and economics expertise wrote a letter to the administration calling its policy change "a strategic misstep that endangers the United States' economic and military edge in artificial intelligence." The group said that the H20 would be "a potent accelerator of China's frontier AI capabilities, not an outdated chip." Nvidia's wins in Washington have brought it headaches in Beijing. Late last month, China's internet regulator, the Cyberspace Administration of China, summoned Huang to a meeting over the possibility that the H20 chip could have "backdoor security risks." Chinese state media has discouraged companies from buying the H20 over the issue. Last week, Nvidia published a blog saying that its AI chips don't have back doors. It also condemned a congressional effort to pass a law known as the Chip Security Act, which would require it to track its chips as a way to prevent the technology from being smuggled to China. "There is no such thing as a 'good' secret backdoor -- only dangerous vulnerabilities that need to be eliminated," the company said.

NVIDIA and AMD agree to pay US government 15% of all revenue from AI chips sold to China

TL;DR: NVIDIA and AMD agreed to pay the US government 15% of AI chip sales revenue in China to secure export licenses, following previous restrictions citing national security risks. China remains a significant market, generating billions in revenue for both companies, while the US now permits H20 chip sales under updated export controls. NVIDIA and AMD have both agreed to pay the US government 15% of all revenue generated from the sale of AI chips to China, according to a new report from Reuters. The new agreement follows the Trump administration's prevention of sales of NVIDIA's H20 chips to China in April, which was then followed up with an announcement last month that sales were going to proceed under a new agreement and that deliveries would begin soon. Notably, on Friday the Commerce Department began issuing licenses for the sale of H20 chips to China, and when asked about the reentry into China an NVIDIA spokesperson told Reuters, "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." Adding, "We follow rules the US government sets for our participation in worldwide markets." China isn't a small market by any means for NVIDIA, with the company generating approximately $17 billion in revenue in China for the fiscal year ending January 26. That $17 billion figure represents 13% of total sales. As for AMD, financial reports for the company reveal it generated $6.2 billion in revenue in China, which accounts for 24% of total revenue. The Financial Times reported that both AMD and NVIDIA agreed to the 15% levy on all AI chips being sold in China in order to obtain the export licenses for their products. The initial banning of AI chips being sold in China was under the pretense that these chips, being in the hands of China, posed a national security risk to the United States. As for how the US government feels about the H20 now, according to a US official, the Trump administration doesn't feel the sale of H20 chips or any equivalent piece of hardware can compromise US national security.

Nvidia, AMD Agree to Pay 15% of China Chip Revenues to US, Report Says

Nvidia (NVDA) and Advanced Micro Devices (AMD) plans to resume sales of key AI chips to China could come with some big strings attached. Both companies have agreed to pay 15% of their China chip revenues to the U.S. government in exchange for export licenses, the Financial Times reported yesterday, after the Trump administration tightened restrictions earlier this year citing national security concerns. The Trump administration and AMD did not immediately respond to a request for comment. A spokesperson for Nvidia told Investopedia, "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race." Both chipmakers have take a significant hit from the Trump administration's curbs, with AMD last week reporting an $800 million charge in the second quarter related to restrictions on the sale of its AI chips to China. Nvidia said in May that it expects to report an $8 billion hit from export restrictions when it releases its quarterly results later this month. Shares of Nvidia and AMD were about 1% lower in premarket trading Monday. Such a deal would mark an unusual shift in how American companies are expected to engage with the government and respond to trade policy changes. Nvidia's plans to resume sales to China came after a number of high-profile visits to the White House by CEO Jensen Huang, including one last week. President Trump also said last week that Apple (AAPL) and others with pledges to build in the U.S. could be exempt from new semiconductor tariffs, after CEO Tim Cook joined Trump at the White House to announce a $100 billion commitment to U.S. production.

Nvidia, AMD To Pay 15% Of China Chip Sale Revenues To U.S., Official Says

AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The U.S. Department of Commerce did not immediately respond to a request for comment. The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licences for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC.

Nvidia, AMD to pay 15% of China chip sale revenues to US, official says - The Economic Times

US President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia last month announced the US said that it would allow the company to resume sales and it hoped to start deliveries soon.Nvidia and AMD have agreed to give the US government 15% of revenue from sales to China of advanced computer chips like Nvidia's H20 that are used for artificial intelligence applications, a US official told Reuters on Sunday. US President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia last month announced the US said that it would allow the company to resume sales and it hoped to start deliveries soon. Another US official said on Friday that the Commerce Department had begun issuing licenses for the sale of H20 chips to China. When asked if Nvidia had agreed to pay 15% of revenues to the US, a Nvidia spokesperson said in a statement, "We follow rules the US government sets for our participation in worldwide markets." The spokesperson added: "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The U.S. Department of Commerce did not immediately respond to a request for comment. China's foreign ministry did not immediately respond to a request for comment. China represents a significant market for both companies. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13% of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24% of total revenue. The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licences for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" US Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. Lutnick said it was in U.S. interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack." The US official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising US national security. The official did not know when the agreement would be implemented or exactly how, but said the administration would be in compliance with the law. Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticized the move. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said.

Nvidia's $8 Billion Loss May Be Averted As US Approves H20 Chip Exports To China Amid Trad Tensions: Report - NVIDIA (NASDAQ:NVDA)

Nvidia Corporation's NVDA plans to ship its H20 artificial intelligence chips to China have received a significant boost, as the U.S. Commerce Department has reportedly granted the company licenses to resume exports, potentially preventing an $8 billion loss. Nvidia Wins Key Export Licenses For H20 Chips To China On Friday, Nvidia overcame a major hurdle after the U.S. granted it export licenses to resume shipments of its H20 graphics processing units (GPUs) to China, reported Reuters. This decision followed a reversal of the previous ban imposed in April due to U.S. export controls targeting China's AI and defense technology sectors. Nvidia had tailored its H20 chip specifically for the Chinese market to comply with these restrictions. Also Read: WeRide And Uber Expand Robotaxi Reach In Abu Dhabi Financial Impact: Nvidia's Losses And Potential Gains The decision is timely, as Nvidia had previously warned that the export restrictions could result in a loss of up to $8 billion in sales during the July quarter. The company had also revealed that it expected a charge of $5.5 billion due to the restrictions, though it was able to mitigate some of the impact by reusing materials. In May, Nvidia reported that the first-quarter charge related to these restrictions was $1 billion less than anticipated. Nvidia CEO Jensen Huang had also expressed concerns that the company's leadership position could be jeopardized without continued access to China, where rival companies like Huawei Technologies are aggressively targeting developers with locally produced chips. China's Growing Local Chip Market Poses Challenges For Nvidia Despite the license approval, Nvidia faces growing competition from Chinese chipmakers such as Huawei, Cambricon and Hygon. Analysts at Bernstein have projected that Nvidia's market share in China's AI chip sector will decline, from 66% in 2024 to 54% in 2025, largely due to local companies' aggressive growth and the impact of U.S. sanctions. Still, analysts like Needham's N. Quinn Bolton remain optimistic. The analyst predicted strong demand for Nvidia's H20 and upcoming China-specific GPUs, forecasting significant future revenue in the Chinese data center market. Geopolitical Tensions Continue Over AI Chips The approval of Nvidia's export licenses is also set against the backdrop of continuing geopolitical tensions between the U.S. and China. The U.S. government has maintained strict controls over the export of cutting-edge semiconductor technologies, citing national security concerns related to China's AI and defense capabilities. This has sparked retaliatory actions from China, including trade barriers aimed at U.S. semiconductor firms. Price Action: On Friday, Nvidia's stock rose 1.09% in regular trading and inched up an additional 0.05% after hours, finishing at $182.83, according to Benzinga Pro. Benzinga's Edge Stock Rankings show NVDA's positive price trend across short, medium and long-term periods. However, despite this solid growth, its overall value score remains comparatively low. Additional performance insights are available here. Read Next: Bill Gates Commits Majority Of $200 Billion Foundation Budget To Africa Over Next 20 Years Amid Trump's Massive USAID Cuts Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo Courtesy: Evolf on Shutterstock.com NVDANVIDIA Corp$182.831.14%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum92.25Growth99.14QualityN/AValue6.20Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

NVIDIA & AMD Required To Pay 15% Of Restricted China GPU Sales To US As Part Of License Approval, Says Report

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. As part of their agreement with the Trump administration to secure licenses for AI GPU sales to China, NVIDIA and AMD have reportedly agreed to pay 15% of their sales revenue to the US government, reports The Financial Times. Both firms secured reprieve from the government in July after their licenses for chip sales entered processing, and a Reuters report on Friday revealed that NVIDIA had received the licenses. Both NVIDIA and AMD have experienced revenue drops from their China sales restrictions, with the FT reporting that the sales in question will cover NVIDIA's H20 GPUs and AMD's MI308 AI accelerators. Reports on Friday which cited government sources to claim that the US had started to grant AI GPU export licenses to NVIDIA came after AMD's CEO shared in an interview that her firm is yet to receive any approvals. In its latest fiscal quarter report, AMD reported a significant operating income drop, which the firm attributed in part to its Chinese sales decline, and while NVIDIA has started receiving the license approvals, it's unclear whether AMD's applications have also moved forward. Ahead of the H20 sales restrictions, NVIDIA had earned $4.6 billion through the chips in its first quarter, with China accounting for 12.5% of the firm's total sales at the time. The firm's shares rose in May after it revealed in its earnings report that the hit to its sales from the H20 restrictions was $1 billion less than expected. The global demand for its products and rosy analyst estimates for AI's long-term demand have pushed NVIDIA's shares to record highs in 2025 and made it the world's most valuable company once again after the disastrous DeepSeek selloff in January. Now, according to the Financial Times, NVIDIA and AMD have agreed to pay 15% of the revenue from their Chinese chip sales to the US government. The publication's sources are unclear on how the government will use the revenue, as it works to reduce the US trade deficit through tariffs levied on most of America's trading partners. While AMD did not respond to the FT's request for comment, NVIDIA, while not confirming the development, noted that it follows the "rules the US government sets for our participation in worldwide markets." It is possible that the Trump administration will use the revenue percentage from the China AI GPU sales to offset the trade deficit or use it to stimulate American chip manufacturing further. A 15% commission to the US government from NVIDIA could mean that the government generates more than $2 billion in revenue from Chinese chip sales in 2025. The AI GPUs have become a hot topic in the US-China trade discussions, with the Chinese eager to have the restrictions lifted. Recent reports have also suggested Beijing's interest in procuring advanced high bandwidth memory (HBM) chips, which are also subject to US restrictions due to the presence of American technology in their design and production. HBM chips are also key components of AI GPUs, implying that, should future chips not sanctioned for sales to China rely on the HBM memory, then they would be restricted by default without any new rules.

NVIDIA's H20 AI Chips Reportedly See 'Green Light' From Trump Administration for Export to China After Jensen's Recent Visit to The White House

NVIDIA's H20 AI chips are now allowed to be exported to China, as the latest meeting between Jensen Huang and President Trump seems to have worked out. For those confused, NVIDIA's CEO, Jensen Huang, announced a few weeks ago that the company would be selling its H20 AI chips to China after approval from the Commerce Department, but back then, the Trump administration itself didn't give the green light. Now, according to a report by the FT, it is revealed that the US has started to issue licenses for NVIDIA's H20 AI chips to be shipped out to China, which means that Team Green is now free to export these chips to Beijing, resuming its business in the region, which was halted for several months. The development comes after NVIDIA's Jensen Huang met President Trump a few days ago, and the license issuance is likely an aftermath of the meeting. It was revealed in a previous report that H20 AI chips were in a massive backlog, mainly due to the delay from the Commerce Department, and despite Team Green reassuring its commitment to China, no shipments were being approved by the US. Not only this, but NVIDIA has also dodged a massive hurdle in the H20 AI chip exports to China, which was an impending investigation by a Chinese regulator. It was claimed that the newer shipments would have security backdoors or location tracking mechanisms within them, but NVIDIA clarified it as well, saying that the firm would never allow such backdoors to exist, despite pressures from US lawmakers. Resuming the China supply chain is Team Green's top priority right now. Now that the H20 AI chips are starting to flow into China, it's likely that NVIDIA will rely on them until year-end before introducing newer solutions such as the Blackwell B20 or the RTX 6000D GPUs for the domestic markets. The firm currently has around 900,000 units of H20 AI chips in their inventory, which means that they would at least manage to cater to the write-offs made in the previous quarters.

Nvidia And AMD Reportedly Agree To Pay 15% Of China Chip Revenues To Trump Administration For Export Licenses: 'Beijing Must Be Gloating' - NVIDIA (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD)

Nvidia Corporation NVDA and Advanced Micro Devices, Inc. AMD have reportedly agreed to pay 15% of their China chip sales revenues to the U.S. government as part of their deal for export licenses. The Unusual Deal Between US Chipmakers And The Trump Administration Nvidia and AMD, two of the leading chipmakers in the world, have entered into an unprecedented agreement with the Donald Trump administration, agreeing to give 15% of their revenues from chip sales in China to the U.S. government, reported the Financial Times on Sunday, citing people familiar with the matter, including a U.S. official. This deal was reportedly a condition for receiving export licenses, allowing both companies to sell their advanced AI chips, the H20 and MI308, to the Chinese market. See Also: AMD CEO Lisa Su Says China Strategy Rebounding As MI308 AI Chips Await US License: 'Better Position Than We Were Ninety Days Ago' Security Concerns And Political Fallout The arrangement has sparked controversy, particularly among U.S. security experts who worry that the chips, particularly the H20, could be used by China's military, thereby undermining U.S. strategic interests in artificial intelligence. Liza Tobin, a former National Security Council official, stated, "Beijing must be gloating to see Washington turn export licenses into revenue streams," the report said. Despite these concerns, Nvidia defended the decision, with a company spokesperson telling the publication, "We follow rules the U.S. government sets for our participation in worldwide markets." Nvidia CEO Jensen Huang, who last month met with President Trump, highlighted the importance of remaining competitive in China. Nvidia, AMD's Market Position And Growing Competition The move also highlights the growing competition Nvidia and AMD face from Chinese chipmakers like Huawei Technologies and Cambricon. Analysts predict that Nvidia's market share in China's AI chip sector will decline in 2025, largely due to local companies' aggressive growth and the impact of U.S. sanctions. Price Action: Over the past five days, Nvidia shares have risen 4.30%, while AMD has slipped 0.95%. Year to date, Nvidia is up 32.12% and AMD has climbed 43.31%, according to Benzinga Pro. Benzinga's Edge Stock Rankings indicate that AMD maintains a strong upward price trend across short, medium and long-term periods. Additional performance details are available here. Read Next: July's 20 Most-Searched Tickers On Benzinga Pro -- Where Do Opendoor, Nvidia, Apple Stock Rank? Photo Courtesy: Richtostock on Shutterstock.com Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. AMDAdvanced Micro Devices Inc$172.510.06%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.05Growth97.69Quality71.99Value12.16Price TrendShortMediumLongOverviewNVDANVIDIA Corp$182.831.14%Market News and Data brought to you by Benzinga APIs

Rising Competition In China Threatens Nvidia's Comeback - NVIDIA (NASDAQ:NVDA)

Nvidia NVDA is set to resume sales of its H20 chips in China following a policy shift by the Trump administration. Still, analysts warn that the company may not regain its previous market dominance due to growing domestic competition and regulatory hurdles. In July, the Trump administration approved Nvidia's request to sell its previously banned H20 chips to China and greenlit a new "fully compliant" version tailored for the market. The decision came after Nvidia had flagged billions of dollars in potential losses tied to U.S. export controls, CNBC reported on Monday. Also Read: China Questions Nvidia's AI Chip As US Export Controls Stoke Tensions However, analysts at Bernstein, as per CNBC, cautioned that Nvidia's market share in China's AI chip sector is likely to shrink. In a recent forecast, the firm projected that Nvidia's share would decline from 66% in 2024 to 54% in 2025. They attributed the drop to recent supply chain disruptions and aggressive gains by local Chinese chipmakers. Bernstein wrote that U.S. export controls have created a unique opportunity for domestic AI processor vendors, highlighting rising players like Huawei, Cambricon, and Hygon. Bernstein also predicted that China's AI chip localization ratio would soar from 17% in 2023 to 55% by 2027. Bernstein's projections also assume that current U.S. chip restrictions will largely remain unchanged, which could make it harder for Nvidia to compete with newer Chinese chips if U.S. offerings fall behind technologically. Washington had imposed multiple semiconductor sanctions on China to restrict its access to sophisticated semiconductor technology, including artificial intelligence technology, citing national security threats. The sanctions followed retaliation from China in the form of banning U.S. semiconductor access (including companies like Micron Technology MU) to its market and backing of domestic firms (like Semiconductor Manufacturing International Corp and Huawei Corp) to develop their technology. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Despite the geopolitical headwinds, Nvidia's stock has surged, gaining over 29% year-to-date and significantly outperforming the NASDAQ 100 Index. This growth is fueled by the ongoing AI infrastructure boom, with tech titans such as Meta Platforms META, Microsoft MSFT, and Alphabet GOOGL aggressively increasing capital expenditures on data centers, servers, and networking. Wedbush analyst Dan Ives has referred to this period as a "watershed moment," while JPMorgan's Samik Chatterjee noted that Meta plans nearly $100 billion in capex by 2026, Alphabet has raised its 2025 target to $85 billion, and Microsoft is on track to surpass $100 billion annually. On the China-specific front, Needham analyst N. Quinn Bolton remains optimistic about Nvidia's prospects. Following the U.S. export license approvals, Bolton expects upside for the company as it resumes H20 GPU shipments. He projects quarterly H20 shipments of $3 billion, with the potential for nearly 100% gross margins on previously written-down inventory. Bolton also anticipates strong demand for Nvidia's forthcoming China-specific Blackwell GPU variants, estimating over $1 billion in preorders and forecasting a robust $20 billion in China data center sales by fiscal 2028. NVDA Price Action: NVDA stock is trading higher by 1% to $175.45 premarket at last check Monday. Read Next: OpenAI Just Raised $8.3 Billion At This Valuation As ChatGPT Growth Soars Image via Shutterstock NVDANVIDIA Corp$175.461.00%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.90Growth98.96QualityN/AValue6.44Price TrendShortMediumLongOverviewGOOGLAlphabet Inc$190.060.49%METAMeta Platforms Inc$757.450.99%MSFTMicrosoft Corp$527.660.68%MUMicron Technology Inc$105.951.02%Market News and Data brought to you by Benzinga APIs

Nvidia Could Add Billions From China Sales If H20 GPUs Get Green Light From US: Analyst - NVIDIA (NASDAQ:NVDA)

BofA Securities analyst Vivek Arya maintained a Buy rating on NVIDIA Corp NVDA with a price target of $220 on Monday. Arya re-rated Nvidia ahead of its second-quarter earnings call, citing strong sales momentum and long-term earnings potential, while flagging some near-term volatility after the stock's strong year-to-date run. The analyst expects second-quarter revenue to come in at $47 billion, beating the $45.8 billion consensus and Nvidia's own $45 billion guide, driven by a continued ramp in Blackwell GPUs and robust cloud infrastructure spending. Also Read: Rising Competition In China Threatens Nvidia's Comeback For the third quarter, Arya forecasts mid-teens quarter-over-quarter growth to $54 billion, ahead of the $52.5 billion consensus, and sees upside potential to $57-$60 billion if H20 shipments officially resume. Gross margins are projected to rise to 73%-74% by the third quarter, aided by Nvidia's rack-scale architecture scaling up, with a potential 200-300 basis point boost if previously written-down H20 inventory (~$5.5 billion in the first quarter) is utilized. Arya also raised its fiscal 2026 or calendar 2025 sales forecast to $210-$215 billion, with projected pro forma EPS of $4.70-$4.80, well above the $4.38 consensus. Arya attributes the expected beat-and-raise to continued strength in Blackwell and Blackwell Ultra, rising and diversified AI-related capex from hyperscalers like Alphabet's Google, Meta Platforms, Oracle and xAI, an expanding product pipeline, improving margins, and the potential $5-$10 billion upside from resumed H20 sales in the second half. Arya did caution that H20 shipments may face regulatory risk due to possible Chinese security probes and may become less competitive as domestic alternatives in China advance. Maintaining U.S. licensing to ship 1-nm or 2-nm chips will also be critical to preserving Nvidia's lead over rivals such as Advanced Micro Devices. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Robust capex projections from all four major U.S. hyperscalers support Arya's longer-term optimism. Meta now expects to spend $100 billion in calendar 2026 (up from a prior $79 billion estimate), while Google and Microsoft also forecast increased spending shifts toward faster-depreciating assets like servers. Meta emphasized strong ROI, and Microsoft noted its capex is tied directly to booked contracts. Based on these trends, Arya sees fiscal 2027 or calendar 2026 earnings power approaching $7 per share, up from the current $5.87 consensus. This assumes the AI total addressable market (TAM) grows from $309 billion to $341 billion, continuing a 60% year-over-year pace. At that level, Nvidia would trade at 25x forward earnings, consistent with its historical mid-20s to mid-30s P/E range. Looking further, Arya estimates Nvidia could target $10 per share in long-term EPS. He views China as accounting for roughly 10% of the global AI accelerator TAM and highlighted reports that Nvidia recently placed an additional 300,000 H20 GPU orders with Taiwan Semiconductor Manufacturing Co. TSM, on top of its existing orders for 600,000-700,000 units. If approved by U.S. regulators, this could unlock $6-$10 billion in incremental China sales between August and January at ~$10,000 Average Selling Price (ASP). However, up to $3-$4 billion may shift to early next year due to a nine-month supply chain ramp. Arya also pointed to investor debates around the third-quarter mix between Blackwell Ultra and standard Blackwell (given the latter's yield challenges), the sustainability of gross margin recovery, and the potential for a tariff-related pull-in in Gaming, mirroring trends seen across consumer-facing semiconductors. NVDA Price Action: Nvidia stock is trading higher by 2.49% to $178.05 at publication on Monday. Read Next: Wayfair Soars As Shoppers Spend Big And Profits Grow Photo: Shutterstock NVDANVIDIA Corp$178.382.68%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum91.90Growth98.96QualityN/AValue6.44Price TrendShortMediumLongOverviewORCLOracle Corp$249.692.15%TSMTaiwan Semiconductor Manufacturing Co Ltd$237.480.97%Market News and Data brought to you by Benzinga APIs

Nvidia, AMD to pay 15% of China chip sale revenues to US: report

Nvidia and AMD have agreed to give the US government 15% of their revenues from chip sales in China, under an arrangement to obtain export licenses for the semiconductors, the Financial Times reported on Sunday. The revenue share applies to Nvidia's H20 chips and AMD's MI308 chips, the report said, citing a US official, adding that the Trump administration had yet to determine how to use the money. The chipmakers agreed to the arrangement as a condition for obtaining export licenses for the Chinese market that were granted last week, FT reported. Nvidia follows rules the US government sets for its participation in worldwide markets, an Nvidia spokesperson told Reuters in an emailed statement. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not immediately respond to a request for comment. The Commerce Department started issuing licenses to Nvidia to export its H20 chips to China last week, removing a significant hurdle to the artificial intelligence bellwether's access to a key market. The US last month reversed an April ban on the sale of the H20 chip to China. The company had tailored the microprocessor specially to the Chinese market to comply with the Biden-era AI chip export controls.

NVIDIA, AMD Agree to Share 15% of China Chip Revenue with US

The deal applies specifically to NVIDIA's H20 artificial intelligence chips and AMD's MI308 processors, both designed for the Chinese market to comply with prior US export restrictions. Licenses allowing these sales were issued last week after months of trade tensions between Washington and Beijing. This marks the first known case of US companies directly paying a portion of their earnings to the government in exchange for export approvals. Export control specialists told FT that they had never encountered such a precedent. The Trump administration has not yet disclosed how the collected funds will be used.

Nvidia, AMD to pay 15% of China chip sale revenues to U.S., official says

Nvidia and AMD have agreed to give the U.S. government 15% of revenue from sales to China of advanced computer chips, a U.S. official said on Sunday, in an unusual move likely to unsettle U.S. companies. U.S. President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia announced last month that Washington had said it would allow the company to resume sales and it hoped to start deliveries soon. Another U.S. official said on Friday that the Commerce Department had begun issuing licences for the sale of H20 artificial intelligence chips to China. Shares of Nvidia and AMD fell 1.8% and 3.3% respectively in pre-market trade on Monday. The deal to pay the U.S. government from sales in China is unusual for a president, and marks Trump's latest intervention in corporate decision-making. He harangues company executives to invest in America to shore up domestic jobs and manufacturing, and demanded last week new Intel INTC.O CEO Lip-Bu Tan immediately resign, calling him "highly conflicted" due to his ties to Chinese firms. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" When asked if Nvidia had agreed to pay 15% of revenues to the United States, an Nvidia spokesperson said in a statement: "We follow rules the U.S. government sets for our participation in worldwide markets." The spokesperson added: "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The U.S. Department of Commerce did not immediately respond to a request for comment. China's foreign ministry, approached for comment on Monday, said that China had repeatedly expressed its position on the issue of U.S. chip exports to China. The ministry in the past has accused the U.S. of using technology and trade issues to "maliciously contain and suppress China." The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. Lutnick said it was in U.S. interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack." The U.S. official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising U.S. national security. The official did not know when the agreement would be implemented nor exactly how, but said the administration would be in compliance with the law. Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticized the move. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13% of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24% of total revenue.

Washington will levy a 15% tax on AMD and Nvidia's AI chip sales in China.

Nvidia and AMD will have to pay 15% of their revenues from sales in China of advanced chips, such as the H20 used for AI, to the US government, according to an article in the Financial Times that has since been confirmed by two other sources. This measure, which the Wall Street Journal considers unusual to say least, is the result of an agreement reached with the Trump administration. It is a condition for the issuance of export licenses. In April, Washington suspended sales of H20 before authorizing them again last month. Nvidia hopes to resume deliveries quickly, while AMD has not commented. China is a key market for both companies: $17bn for Nvidia (13% of its sales) and $6.2bn for AMD (24% of its revenue) in their last financial years. Commerce Secretary Howard Lutnick justified the reauthorization by citing the need to negotiate an agreement on rare earths and the need to keep Chinese companies on US technology, even if limited. The most advanced chips remain banned from export. The decision is divisive. For Geoff Gertz of the Center for New American Security, it lacks consistency: if the sale of H20s is a risk to national security, it should not take place. And if that is not the case, why impose a levy? Former advisor Alasdair Phillips-Robins sees it as a trade-off between national security and revenue for the Treasury. The share of AI chips in the two groups' combined revenue is unknown, but to give an order of magnitude, 15% of $23.2bn, the combined annual revenue of AMD and Nvidia in China, represents $3.5bn.

Nvidia, AMD to pay 15% of China chip sale revenues to US, official says - VnExpress International

U.S. President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia last month announced the U.S. said that it would allow the company to resume sales and it hoped to start deliveries soon. Another U.S. official said on Friday that the Commerce Department had begun issuing licenses for the sale of H20 chips to China. When asked if Nvidia had agreed to pay 15% of revenues to the U.S., a Nvidia spokesperson said in a statement, "We follow rules the U.S. government sets for our participation in worldwide markets." The spokesperson added: "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The U.S. Department of Commerce did not immediately respond to a request for comment. The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money. "It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?" U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. Lutnick said it was in U.S. interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack." The U.S. official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising U.S. national security. The official did not know when the agreement would be implemented or exactly how, but said the administration would be in compliance with the law. Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticized the move. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said.

Nvidia, AMD to pay 15% of China chip sales to US, official says

STORY: Nvidia and AMD have agreed to give the U.S. government 15% of revenue from sales to China of advanced computer chips. That's according to a U.S. official who spoke to Reuters on Sunday. :: Nvidia It includes chips like Nvidia's H20 that are used for artificial intelligence applications. Citing national security concerns, U.S. President Donald Trump's administration in April blocked sales of H20 chips to China, but last month reversed course, saying it would allow sales to China to resume. China represents a significant market for both companies, with sales there accounting for 24% of total revenue for AMD for 2024, and 13% of total sales for Nvidia in the fiscal year ending in late January this year. When asked if Nvidia had agreed to pay 15% of its China revenues to the U.S., a company spokesperson said, quote, "We follow rules the U.S. government sets for our participation in worldwide markets." China's foreign ministry did not immediately respond to a request for comment. :: File The U.S. official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising U.S. national security. The official did not know when the 15% agreement would be implemented or exactly how, but said the administration would be in compliance with the law. The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors. The report said the Trump administration had yet to determine how to use the money.