Nvidia and AMD to pay 15% of China AI chip sales to US government.

Nvidia and AMD have reportedly agreed to pay 15% of their Chinese AI chip sales revenues to the US government in exchange for export licenses. This move aims to resolve ongoing trade tensions between the US and China. The agreement is expected to benefit both companies by allowing them to continue selling their AI chips in China while also addressing US concerns about the sale of sensitive technology to the country.

Nvidia and AMD have reportedly agreed to share 15% of their revenues from AI chip sales in China with the U.S. government as a condition for obtaining export licenses. This unprecedented arrangement aims to resolve ongoing trade tensions between the U.S. and China while allowing these companies to continue selling their advanced AI chips in the lucrative Chinese market.

The agreement was reportedly brokered after Nvidia's CEO, Jensen Huang, met with former U.S. President Donald Trump. The meeting led to the U.S. Commerce Department beginning to issue licenses for Nvidia's H20 chips to China, which had been banned since April. The H20 chips are designed specifically for the Chinese market and are less powerful than those sold to U.S. businesses and allies.

The deal is expected to generate substantial revenue for the U.S. government. Nvidia is projected to sell over $15 billion worth of H20 chips by the end of the year, while AMD's China sales could reach $800 million. This arrangement is not entirely without precedent, as the Trump administration has previously intervened in the business dealings of U.S. companies.

The U.S. has maintained that it will not export its most advanced chips to China to preserve its technological edge. The H20 chip was designed specifically for China and is less powerful than chips sold to U.S. businesses and allies. The administration has stated it will continue to block sales of Nvidia's most advanced products to China.

This development is a significant win for Nvidia and AMD, which have been seeking to maintain their market position in China. The H20 chip is one of the few advanced AI chips that Nvidia can now export to China, and this agreement ensures a pathway for future sales. For investors, this news suggests a potential recovery in revenue for these companies, particularly if they can successfully navigate the competitive landscape in China.

References:
[1] https://www.theguardian.com/technology/2025/aug/10/nvidia-amd-china-chip-sale-revenues
[2] https://www.ainvest.com/news/nvidia-amd-reportedly-agree-give-gov-15-china-chip-sales-2508/
[3] https://www.business-standard.com/world-news/nvidia-amd-china-chip-sales-us-revenue-share-trump-deal-125081100136_1.html
[4] https://thefinancialexpress.com.bd/home/us-licenses-nvidia-to-export-chips-to-china-official-says?amp=true