Nvidia, AMD to Share 15% Revenue with U.S. Amid AI News Export Deal

Nvidia and AMD have reportedly agreed to remunerate the U.S. government with 15% of their revenues from semiconductor sales to China as part of a new deal concerning export licenses. This arrangement has emerged amid ongoing U.S.-China trade tensions where technology sales, particularly in the domain of artificial intelligence chips, have become a pivotal issue.

The accord reportedly stems from negotiations between the Trump administration and these tech giants to facilitate the export of specific chip models, Nvidia's H20 chips and AMD's MI308 chips, to China. Nvidia CEO Jensen Huang allegedly engaged in direct dialogue with President Donald Trump, navigating intricate export control parameters to enable U.S. firms to maintain competition abroad.

The revenue-sharing strategy, although unprecedented, stands to generate significant financial returns for the U.S. However, there remains considerable uncertainty about its implementation, given China's existing reservations regarding the security of these AI chips. Concerns articulated by sources affiliated with Chinese state media suggest potential security vulnerabilities, including purported "backdoors" within the chips that could jeopardize their functionality. Such allegations have been consistently denied by Nvidia.

In the broader context, these AI chips are of monumental significance as both nations continue to contest supremacy in the tech field. The rivalry has seen America taking defensive measures against possible military applications of its technology by China, particularly in the AI spectrum. U.S. legislators have expressed apprehensions about the implications of relaxing these export controls, emphasizing the need for scrutiny to avert any national security threats.

The expiration of a trade truce reducing tariffs coincides with this deal, yet discussions appear poised for extension following recent diplomatic engagements. U.S. Treasury Secretary Scott Bessent previously acknowledged the role of such export controls as leverage within the trade negotiations, underscoring the intricate interplay of commerce and diplomatic strategy.

The introduction of Nvidia's H20 chip last year followed stringent export restrictions enacted under the Biden administration. These controls are intended to maintain American leadership in innovative technology while safeguarding against its potential adversarial use.

Adding complexity to the situation, China's call for self-sufficiency in technology heightens its pursuit of indigenous chip development. Such ambitions, driven by Beijing, resonate with historical instances where the U.S. has challenged the integration of Chinese technology in global infrastructures due to similar security concerns.

Further intricacies appear with reports indicating China’s insistence on easing export controls regarding high-bandwidth memory (HBM) chips. This specific demand aligns with a broader strategic dialogue ahead of anticipated high-level meetings between U.S. and Chinese leaders.

Collectively, these developments underscore a profound intersection of commerce, diplomacy, and technological innovation between the U.S. and China, as both parties meticulously navigate their ongoing strategic rivalry.