The Strategic Implications of U.S.-China AI Chip Trade Policy on Semiconductor Stocks

The U.S.-China rivalry in artificial intelligence and semiconductor technology has reached a critical inflection point, with export controls and revenue-sharing agreements under the Trump administration reshaping the competitive landscape for global chipmakers. For investors, the interplay between national security imperatives, corporate profitability, and geopolitical risk presents a complex calculus. This analysis evaluates how Trump-era policies-ranging from restrictive export controls to controversial revenue-sharing deals-have altered the risk-rebalance and growth trajectories of semiconductor leaders like Nvidia, AMD, and Intel, while assessing the long-term investment implications in a high-stakes global tech rivalry.

Policy Shifts: From Restrictions to Revenue-Sharing

The Trump administration's approach to U.S.-China AI chip trade has been marked by a transactional, actor-based strategy. Initially, the administration expanded export controls by adding Chinese entities to the Commerce Department's Entity List and tightening restrictions on advanced semiconductor manufacturing equipment. However, in a dramatic reversal, the administration introduced revenue-sharing agreements, allowing U.S. firms to sell advanced chips to China in exchange for a percentage of sales revenue. For example, Nvidia and AMD agreed to share 15% of their China chip sales revenue with the U.S. government, while Intel faced a 25% revenue-sharing requirement for high-end AI chips like the H200.

These policies reflect a dual objective: maintaining U.S. technological leadership while generating domestic revenue. Yet, they also raise constitutional and strategic concerns. Critics argue that the revenue-sharing model blurs the line between national security and profit-making, potentially undermining the integrity of export controls. Furthermore, the administration's inconsistent enforcement-such as reversing bans on specific chips like the H20-has created regulatory uncertainty for semiconductor firms.

Financial and Strategic Adjustments: Nvidia and AMD

Nvidia and AMD, two of the most prominent players in AI chip manufacturing, have adapted to these policy shifts with significant financial and strategic adjustments. Both companies have historically relied on China as a key market, with China accounting for 13% of Nvidia's global revenue and 24% of AMD's in recent fiscal years. The revenue-sharing agreements, while controversial, have provided a lifeline to access this market. For instance, Nvidia's H20 chip-initially banned due to national security concerns-was reintroduced after the deal, enabling the company to maintain a foothold in China.

Financially, the agreements have allowed both firms to sustain R&D investments, which are critical for maintaining technological edge. In 2024-2025, Nvidia spent $9.9 billion on R&D, while AMD allocated $6.5 billion. However, the 15% revenue-sharing requirement has drawn scrutiny from lawmakers and security experts, who warn it could set a precedent for monetizing national security decisions. Analysts remain divided: while some view the deals as a pragmatic solution to global competition, others caution that they may erode U.S. technological dominance by enabling China's AI infrastructure development.

Intel's Restructuring and Political Backing

Intel's experience under Trump-era policies highlights the intersection of industrial policy and corporate strategy. The Trump administration's $8.9 billion investment in Intel-providing the U.S. government with a 9.9% equity stake-marked a significant intervention aimed at stabilizing the company's balance sheet and advancing domestic semiconductor manufacturing. This move, coupled with a 25% revenue-sharing requirement for AI chip sales to China, has forced Intel to adopt a more disciplined approach to capital expenditures and restructuring.

Financially, Intel's performance has been mixed. In Q2 2025, the company reported $12.9 billion in revenue, with a gross margin decline to 27.5%. However, by Q3 2025, revenue rose to $13.7 billion, supported by government funding and strategic shifts toward AI-focused manufacturing. Intel's stock has also benefited from Trump's public endorsement, surging 2.63% in pre-market trading after the president praised its CEO and sub-2-nanometer processors. Analysts project a 50% upside for Intel's shares, driven by its alignment with U.S. industrial policy and technological advancements.