Trump Admin Lets Nvidia, AMD Sell AI Chips to China for 15% Revenue Share

The Trump administration has approved a controversial deal allowing Nvidia and AMD to resume sales of previously banned AI chips to China, in return for the U.S. government receiving 15% of the revenue generated from those sales [1]. This marks a significant shift in export control policy, where access to restricted technology is now directly tied to financial payment [2]. The agreement, announced amid broader discussions with Beijing on rare earth minerals, has triggered bipartisan criticism over its implications for national security and the integrity of export policy [3].

The deal primarily involves the H20 AI chip from Nvidia, a product previously restricted by Washington. Trump’s decision to lift the ban and instead impose a revenue-sharing arrangement has been characterized by critics as a “pay-for-play” model that undermines longstanding export control principles [4]. Lawmakers from both parties have expressed concerns that the move could create a precedent where national security is effectively for sale [5]. John Moolenaar, chair of the House Select Committee on China, warned that such an approach could embolden foreign adversaries and weaken U.S. technological advantage [6]. Similarly, Raja Krishnamoorthi emphasized that the agreement sends a dangerous message that national security can be negotiated for financial gain [7].

The Trump administration has defended the deal by highlighting the H20’s limited strategic value, with Commerce Secretary Howard Lutnick describing it as a “fourth-best” chip and downplaying its potential impact on U.S. technological dominance [8]. The administration has also indicated openness to allowing a scaled-down version of Nvidia’s Blackwell chips to be exported to China, suggesting a broader trend of negotiating access to restricted technology [9]. However, critics argue that this approach risks enabling China’s AI development and eroding the U.S. position in the global semiconductor industry [10].

Legal experts remain divided on the legality of the revenue-sharing arrangement. The U.S. Constitution prohibits Congress from imposing export taxes, and while the administration has not officially labeled the 15% payment as such, legal scholars like Jeremy Iloulian and Kyle Handley suggest it functions effectively as one [11]. The lack of clarity has raised concerns about the precedent this agreement may set for future export licenses and the potential for similar financial arrangements across other sectors [12].

From a financial perspective, analysts warn that the 15% fee could reduce profit margins for China-bound processors by 5 to 15 percentage points, with Bernstein analysts labeling it a “slippery slope” that may encourage the U.S. to apply similar fees to other critical exports [13]. Hendi Susanto, a portfolio manager at Gabelli, noted that companies now face uncertainty over whether the same model will apply to other strategic goods, calling the payment both a potential burden and a necessary lifeline for maintaining market access in China [14].

The deal reflects a broader shift in Trump’s second administration toward blending economic incentives with trade concessions, a strategy that has drawn mixed reactions. While the agreement provides immediate financial benefits to the U.S. government, its long-term effects on national security and market competitiveness remain unclear. As debates continue, the deal underscores the complex balancing act between economic interests and strategic priorities in U.S. trade policy.

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[1] US Demands 15% of Nvidia and AMD's China AI Chip ... (https://winbuzzer.com/2025/08/12/us-demands-15-of-nvidia-and-amds-china-ai-chip-revenue-in-unprecedented-deal-xcxwbn/)

[2] MTG enjoyed 142% windfall on company's ICE contract but ... (https://uk.news.yahoo.com/mtg-cashed-ice-contractor-big-150116436.html)

[3] Editorial Roundup: United States (https://wtop.com/national/2025/08/editorial-roundup-united-states-4/)

[4] Trump defends deal to sell Nvidia export control license (https://subscriber.politicopro.com/article/2025/08/trump-defends-deal-to-sell-nvidia-export-control-license-00503778)

[5] Editorial Roundup: United States - Yahoo News Canada (https://ca.news.yahoo.com/editorial-roundup-united-states-225046424.html)

[6] Updates: Trump's Foreign-Policy Shifts (https://foreignpolicy.com/projects/trump-presidency-personnel-cabinet-policy-issues/)

[7] Some thoughts on six months of Trump 2.0 - Urbanomics (https://urbanomics.substack.com/p/some-thoughts-on-six-months-of-trump)

[8] Trump draws backlash over Nvidia export control license (https://aspicts.substack.com/p/trump-draws-backlash-over-nvidia)

[9] 'Wild!': CNN Data Chief Says This Trump Story Is 'Quickly ... (https://www.aol.com/wild-cnn-data-chief-says-001903042.html)