Nvidia and AMD have reportedly agreed to allocate 15 percent of their chip sales revenue in China to the U.S. government, according to a U.S. government official. This move, considered unusual, is likely to impact American companies. The Trump administration had previously suspended the sale of advanced computer chips to China in April citing national security concerns. However, Nvidia and AMD disclosed in July that they were granted permission by Washington to resume sales of the H20 and MI308 chips, crucial for artificial intelligence development.
The unnamed official, confirming the revenue-sharing terms of the agreement to The Associated Press, stated that the initial report by The Financial Times was accurate. As part of the deal, Nvidia and AMD agreed to share a portion of their revenues with the U.S. government to secure export licenses for sales to China. AMD announced on Monday that its license applications to export chips to China had been approved by the U.S. government.
While Nvidia did not delve into specifics of the agreement or its reciprocal nature, the company emphasized its commitment to comply with export regulations outlined by the administration. In a statement, Nvidia underscored its adherence to U.S. government rules for global market participation and expressed hope that export control regulations would enable American competitiveness in China and worldwide, particularly in crucial sectors like 5G and telecommunications.
The leading Democrat on a House panel focusing on competition with China, Rep. Raja Krishnamoorthi, raised apprehensions regarding the reported agreement, branding it as a “dangerous misuse of export controls undermining national security.” Krishnamoorthi pledged to investigate the legal basis of the arrangement and demanded full transparency from the administration, emphasizing that national security decisions should not be driven by revenue motives disguised as security policies.
In July, Nvidia argued that stringent export controls on chip sales could incur an additional $5.5 billion in costs for the company. The company contended that such restrictions impede U.S. competitiveness in a sector crucial to one of the world’s largest technology markets, cautioning that U.S. export controls could inadvertently drive other nations towards China’s AI technology.
The agreement between Nvidia, AMD, and the U.S. government to share revenues from sales in China marks a rare move for a president and signifies Trump’s latest intervention in corporate decision-making. The administration’s push for companies to invest in the U.S. to bolster domestic employment and manufacturing has been evident in recent interactions, including Trump’s call for the resignation of Intel’s CEO due to alleged conflicts of interest with Chinese firms.
The debate continues on whether selling H20 chips to China poses a national security risk or not, with experts questioning the imposition of additional penalties if the chips are deemed safe. Commerce Secretary Howard Lutnick revealed in July that Nvidia’s chip sales resumption in China was tied to a trade agreement involving rare earth magnets between the two nations. The restrictions on advanced chip sales to China have been pivotal in the AI competition between the U.S. and China, with proponents arguing for the necessity of such controls to maintain American leadership.
Opponents of export controls argue that loopholes exist and that these restrictions could potentially drive innovation. The emergence of China’s DeepSeek AI chatbot earlier this year reignited concerns over how China could leverage advanced chips for enhancing its AI capabilities.