AI chips from Nvidia and AMD displayed against the flags of the U.S. and China, illustrating the companies’ new agreement to share 15% of Chinese sales revenue with the U.S. government in exchange for export licenses. Image Source: ChatGPT-5
Nvidia, AMD to Pay 15% of China AI Chip Revenue to U.S. Under New Deal
Key Takeaways:
Nvidia and AMD will pay the U.S. government 15% of revenue from AI chip sales to China.
The deal grants both companies export licenses to sell in the Chinese market.
Nvidia’s H20 and AMD’s MI308 chips are designed specifically for China under U.S. export restrictions.
Trump administration officials say the chips are inferior to U.S. domestic models.
Critics warn the agreement could help China compete in AI technology.
Nvidia, AMD Strike Unprecedented Export Deal
Nvidia and Advanced Micro Devices have reached an agreement with the Trump administration to pay the U.S. government 15% of revenue from their AI chip sales in China, a White House official confirmed to ABC News.
In return, the companies will receive export licenses allowing them to sell advanced AI chips in the Chinese market. The Financial Times first reported the deal, which the White House described as highly unusual.
Speaking to reporters Monday, former President Donald Trump recounted his conversation with Nvidia. "I said, 'If I'm going to do that, I want you to pay us as a country something, because I'm giving you a release,’" Trump said.
Chips Designed for Export Under Restrictions
In recent years, Nvidia, based in Santa Clara, California, has grown into one of the world’s largest technology firms, powering chatbots and other AI tools.
Last month, the company announced the Trump administration had granted permission to sell its H20 chip to China—a model designed to comply with export restrictions introduced under the Biden administration in 2022.
However, export licenses were not issued immediately. Under the new deal, Nvidia will be able to proceed with H20 shipments, while AMD—which offers an MI308 chip for Chinese customers—will also gain permission to sell in China.
Concerns Over China’s AI Capabilities
Some critics argue that allowing sales of high-end AI chips to China could help the country advance its AI capabilities and close the gap with the United States.
The Trump administration has countered by emphasizing the limited performance of the exported chips. Commerce Secretary Howard Lutnick told CNBC last month that the H20 chip is Nvidia’s “fourth best” product, adding, “We don’t sell them our best stuff, not our second best stuff, not even our third best.”
Nvidia did not comment directly on the revenue-sharing arrangement, but said in a statement to ABC News:
"We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race."
AMD did not respond to ABC News’ request for comment.
Revenue-Sharing as Policy Tool
The deal is part of a broader pattern of direct White House intervention in corporate affairs. Earlier this year, when Nippon Steel acquired U.S. Steel, the Trump administration obtained a “golden share” granting significant influence over board appointments and major company decisions.
More recently, Trump publicly called for Intel CEO Lip-Bu Tan to resign, accusing him of being “HIGHLY conflicted”. The statement followed Republican Sen. Tom Cotton’s concerns about Tan’s alleged ties to China, though Trump offered no evidence for the claim. Tan remains in his position.
Q&A: Nvidia, AMD China AI Chip Deal
Q: What did Nvidia and AMD agree to in the new deal?
A: They agreed to pay the U.S. government 15% of revenue from AI chip sales in China in exchange for export licenses.
Q: Which AI chips will be sold to China?
A: Nvidia’s H20 chip and AMD’s MI308 chip, both designed to comply with U.S. export rules.
Q: Why are critics concerned about the deal?
A: Some believe it could help China compete with the U.S. in AI technology.
Q: How does the U.S. describe the chips being sold?
A: The Trump administration says they are inferior to U.S.-sold models, calling the H20 Nvidia’s “fourth best” chip.
Q: Has Nvidia commented on the revenue-sharing arrangement?
A: Nvidia did not address it directly but stated it follows U.S. government rules for global markets.
What This Means
The Nvidia-AMD revenue-sharing arrangement marks a unusual blend of trade policy and corporate negotiation, highlighting how the U.S. is willing to authorize selective technology exports in exchange for direct financial benefits. While the AI chips approved for China are less advanced than domestic models, the deal still underscores the global demand for American AI hardware—and the strategic balancing act between protecting national security and maintaining market access.
For the AI industry, it’s a signal that Washington may seek creative, revenue-linked solutions to navigate the tension between open trade and technological control.
Editor’s Note: This article was created by Alicia Shapiro, CMO of AiNews.com, with writing, image, and idea-generation support from ChatGPT, an AI assistant. However, the final perspective and editorial choices are solely Alicia Shapiro’s. Special thanks to ChatGPT for assistance with research and editorial support in crafting this article.