Nvidia and AMD to lose 15% of Chinese revenue due to Trump administration trade deal negotiations.

Nvidia and AMD to lose 15% of Chinese revenue due to Trump administration trade deal negotiations.

In a significant development, Nvidia Corp. and Advanced Micro Devices Inc. (AMD) have agreed to pay 15% of their revenues from chip sales to China to the U.S. government as part of a deal with the Trump administration to secure export licenses. The Financial Times reported this agreement, citing a US official who stated that Nvidia would share 15% of the revenue from sales of its H20 chip in China and AMD will deliver the same share from MI308 revenues [1].

This decision follows an earlier report from the Financial Times that the Commerce Department started issuing H20 licenses on Friday, two days after Nvidia Chief Executive Officer Jensen Huang met President Donald Trump. The Trump administration had frozen the sale of some advanced chips to China earlier this year as trade tensions spiked between the world’s two largest economies [1].

The agreement highlights the evolving dynamics of U.S. export controls on China's AI semiconductors. While the U.S. has shifted from strict restrictions to strategic flexibility, prioritizing "trusted allies" while pressuring China's self-reliance, companies like AMD and Nvidia face revenue risks from China's $16 billion AI chip market [2]. However, they also gain opportunities through relaxed export rules to Saudi Arabia and Middle Eastern partnerships.

AMD and Nvidia are at the forefront of this transition. Despite the financial hit from U.S. export restrictions, AMD reported record revenue of $7.7 billion in Q2 2025, driven by strong demand for its EPYC processors and Ryzen CPUs. The company is now pivoting to its MI350 and MI400 series, with the MI355X already outperforming Nvidia's GB200 in token-per-dollar efficiency [2].

Nvidia, meanwhile, is navigating a complex path. Its H20 chips, downgraded to comply with U.S. restrictions, still account for 12.5% of the company's revenue. However, Chinese firms like ByteDance and Alibaba have spent $16 billion stockpiling these chips, creating a shadow market. The Trump administration's potential approval of new licenses could reignite demand, but Nvidia must also contend with Huawei's CloudMatrix 384 system, which integrates 384 Ascend 910C chips to deliver 300 PFLOPs of raw compute power—nearly double the performance of Nvidia's GB200 NVL72 [2].

The U.S.-China semiconductor rivalry has long been a battleground for technological supremacy, but recent shifts in export control policies are reshaping the landscape. As the Trump administration recalibrates its approach to chip exports, investors must grapple with a pivotal question: Will easing restrictions unlock new opportunities for U.S. tech giants like AMD and Nvidia, or will they accelerate China's self-reliance in AI semiconductors? The answer lies in understanding the interplay of policy, innovation, and market dynamics [2].

References:
[1] https://www.bloomberg.com/news/articles/2025-08-10/nvidia-amd-to-pay-15-of-china-chip-sale-income-to-us-ft-says
[2] https://www.ainvest.com/news/china-trade-dynamics-future-ai-semiconductor-exports-2508/
[3] https://www.benzinga.com/markets/tech/25/08/46918083/nvidia-holds-near-highs-as-amd-super-micro-disappoint