US takes 15% cut from Nvidia and AMD China chip sales under new deal

Nvidia and AMD have agreed to pay the U.S. government 15% of revenues from sales of advanced AI chips to China, including Nvidia’s H20 and AMD’s MI308 processors, according to a U.S. official. The arrangement serves as a condition for obtaining export licenses after the Trump administration halted such sales in April, raising questions about whether chip exports to China constitute a national security risk or simply a revenue opportunity.

What you should know: The revenue-sharing agreement applies specifically to advanced AI chips that were previously restricted from Chinese markets.

• Nvidia’s H20 chips, described by Commerce Secretary Howard Lutnick as the company’s “fourth-best chip,” can now resume sales to China after months of suspension.
• AMD’s MI308 chips are also covered under the same licensing arrangement, though AMD has not responded to requests for comment about the agreement.
• The Commerce Department began issuing licenses for H20 chip sales to China on Friday, though the Trump administration has not yet determined how to use the collected revenue.

The big picture: The policy reflects the administration’s attempt to balance national security concerns with economic interests in the critical semiconductor market.

• Commerce Secretary Lutnick argued that allowing Chinese companies to use American technology, even older generations, keeps them dependent on the U.S. “tech stack.”
• A U.S. official stated that the administration does not believe selling H20 and equivalent chips compromises national security, distinguishing them from more advanced processors.

What experts are saying: Policy analysts are questioning the logic behind the revenue-sharing arrangement.

• “Either selling H20 chips to China is a national security risk, in which case we shouldn’t be doing it to begin with, or it’s not a national security risk, in which case, why are we putting this extra penalty on the sale?” said Geoff Gertz, a senior fellow at the Center for New American Security, a Washington-based think tank.
• Former Biden administration Commerce Department adviser Alasdair Phillips-Robins criticized the move, stating: “If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury.”

Company response: Nvidia confirmed it follows U.S. government rules while expressing hope for expanded market access.

• “We follow rules the U.S. government sets for our participation in worldwide markets,” a Nvidia spokesperson said in a statement.
• The company added: “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”

Why this matters: The arrangement represents a novel approach to semiconductor export controls that prioritizes revenue generation over traditional security restrictions, potentially setting a precedent for how the U.S. manages technology transfers to strategic competitors while maintaining economic benefits from American innovation.