U.S. Imposes 15% Revenue Share on Nvidia and AMD's AI Chip Sales to China Amid Escalating Tech Rivalry

45 Sources

The Trump administration has ordered Nvidia and AMD to pay 15% of their AI chip sales revenue to China to the U.S. government. This unprecedented move comes as part of ongoing efforts to control advanced technology exports and maintain U.S. dominance in the AI sector.

U.S. Imposes Revenue Share on AI Chip Sales to China

In an unprecedented move, the Trump administration has ordered Nvidia and AMD to pay a 15% revenue share to the U.S. government on their AI chip sales to China. This decision comes as part of ongoing efforts to control advanced technology exports while allowing American companies to compete in the Chinese market 12.

The Deal and Its Implications

Source: The Verge

Source: The Verge

Nvidia CEO Jensen Huang reportedly reached an agreement with President Donald Trump just days before the Commerce Department granted licenses to sell AI chips to China. The approved shipments include Nvidia's H20 and AMD's MI308, both stripped-down versions of their AI-focused GPUs designed to comply with U.S. export rules 1.

This revenue-sharing arrangement marks a significant shift in U.S. strategy, balancing national security concerns with economic interests. An Nvidia spokesperson stated, "We follow rules the U.S. government sets for our participation in worldwide markets," emphasizing the importance of maintaining America's competitiveness in the global AI technology stack 3.

The U.S.-China Chip Race

The decision is set against the backdrop of an intensifying technological rivalry between the U.S. and China. Both superpowers are racing to build chip development capabilities while reducing dependencies on each other. This contest has led to historic subsidies, new export controls, and a scramble to onshore production 2.

Chris Miller, professor at Tufts University, notes, "We're definitely seeing more bifurcation in the chip industry, as China pours money into building a self-sufficient supply chain." However, China still relies heavily on imported chipmaking tools and materials, especially for high-end production 2.

Potential for Enhanced Chip Sales

Source: Reuters

Source: Reuters

President Trump has indicated the possibility of allowing Nvidia to sell cut-down versions of its latest Blackwell AI processors to Chinese entities. These chips, even with 30% to 50% reduced performance, would still significantly outperform currently available options in China 4.

This potential move has raised concerns among China hardliners who prefer stricter limitations on technology exports. However, it could prove financially beneficial for companies like Nvidia and AMD, allowing them to charge more for advanced hardware while contributing to U.S. government coffers 4.

Challenges in Export Control Enforcement

Despite tightened restrictions, recent reports show Chinese companies obtained over $1 billion worth of Nvidia GPUs through smuggling in just three months. This has prompted discussions about embedding location-tracking technology directly into high-end chips to curb AI hardware smuggling 5.

Michael Kratsios, Director of the White House Office of Science and Technology Policy, confirmed that both software-based and physical tracking solutions are being considered. However, this approach faces technical and commercial hurdles, including potential increases in costs and new security vulnerabilities 5.

Industry Perspectives and Future Outlook

Source: Tom's Hardware

Source: Tom's Hardware

The semiconductor industry remains divided on the effectiveness of export controls. Nvidia CEO Jensen Huang has criticized U.S. chip restrictions as a "failure," warning that overregulation could accelerate China's domestic chip development 5.

As the largest global consumer of semiconductors, China's market remains crucial for U.S. companies. The country is expected to hold 30% of the world's global foundry production capacity by 2030, making it the world's largest hub of semiconductor production 2.

This evolving situation underscores the delicate balance between maintaining technological leadership and participating in the global market. As the U.S. and China continue their tech rivalry, the semiconductor industry finds itself at the center of a complex geopolitical and economic landscape that will shape the future of AI and computing technologies worldwide.

Explore today's top stories

Anthropic Raises $13B, Reaching $183B Valuation Amid Explosive Growth

AI startup Anthropic secures a massive $13 billion Series F funding round, skyrocketing its valuation to $183 billion. The company reports exponential growth in revenue and customer base, solidifying its position as a major player in the AI industry.

TechCrunch logoThe Verge logoReuters logo

17 Sources

Business

3 hrs ago

Anthropic Raises $13B, Reaching $183B Valuation Amid

Salesforce Cuts 4,000 Support Jobs as AI Takes Over Customer Service

Salesforce CEO Marc Benioff reveals the company has reduced its customer support workforce by 4,000 jobs, replacing them with AI agents. This move highlights the growing impact of AI on employment in the tech industry.

The Register logoTechRadar logoFortune logo

4 Sources

Technology

3 hrs ago

Salesforce Cuts 4,000 Support Jobs as AI Takes Over

OpenAI Acquires Statsig for $1.1 Billion, Reshuffles Leadership Team

OpenAI announces the acquisition of product testing startup Statsig for $1.1 billion and appoints its CEO as CTO of Applications, while also making significant changes to its leadership team.

TechCrunch logoReuters logoCNBC logo

4 Sources

Business

3 hrs ago

OpenAI Acquires Statsig for $1.1 Billion, Reshuffles

Microsoft Offers Massive Discounts on Cloud Services to US Government, Including Free AI Access

Microsoft strikes a deal with the US General Services Administration, offering significant discounts on cloud services and free access to its AI tool Copilot, potentially saving the government billions.

The Register logoReuters logoCNBC logo

7 Sources

Technology

11 hrs ago

Microsoft Offers Massive Discounts on Cloud Services to US

The Dark Side of AI Companions: Risks for Teens and Young Adults

Recent studies and tragic incidents highlight the potential dangers of AI chatbots and companions for vulnerable youth, raising concerns about mental health support and suicide prevention.

Stanford News logoLive Science logoU.S. News & World Report logo

3 Sources

Technology

3 hrs ago

The Dark Side of AI Companions: Risks for Teens and Young
TheOutpost.ai

Your Daily Dose of Curated AI News

Don’t drown in AI news. We cut through the noise - filtering, ranking and summarizing the most important AI news, breakthroughs and research daily. Spend less time searching for the latest in AI and get straight to action.

© 2025 Triveous Technologies Private Limited
Instagram logo
LinkedIn logo