Nvidia and AMD have agreed to a landmark deal where the U.S. government will take 15% of their AI chip sales revenue in China. This arrangement is tied to securing export licenses for Nvidia’s H20 and AMD’s MI308 AI chips, enabling both companies to resume and expand sales in one of the world’s largest technology markets.
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U.S. Government to Take Cut of Nvidia and AMD AI Chip Sales to China
The agreement, forged under the Trump administration in 2025, requires Nvidia and AMD to share a significant portion of their Chinese chip sales revenue with the U.S. government. This revenue-sharing is unusual in trade policy and has no clear precedent, marking a new approach to balancing economic interests with national security concerns.
- Nvidia will remit 15% of its revenue from the sale of the H20 chip.
- AMD will do the same for revenues earned from the MI308 chip.
- These chips are designed specifically for AI applications and are vital for the companies’ competitiveness in the Chinese market.
- The deal was confirmed after Nvidia CEO Jensen Huang met with President Trump at the White House, accelerating export license approvals.
Key Points Summary — Fast Facts on Nvidia AMD Chip Sales
- 15% revenue cut: The U.S. government takes this share from China chip sales by Nvidia and AMD.
- Chips involved: Nvidia’s H20 and AMD’s MI308 AI chips.
- Reason: Export license grant to China’s market amid geopolitical and trade restrictions.
- Market significance: China is critical, with Nvidia’s fiscal 2024 China revenue at $17 billion (13% of sales) and AMD’s at $6.2 billion (24% of sales).
- U.S. policy: Reflects an unprecedented financial stake by the government in corporate overseas sales.
- Nvidia’s compliance: The company states it follows U.S. export regulations diligently.
- AMD’s response: No official comment at the time.
A Unique Arrangement in Global Trade and Technology
This revenue-sharing agreement stands out in international business dealings. Traditionally, export licenses are granted based on security assessments but do not include financial revenue sharing. Analysts and experts express mixed views on this strategy:
- Some question the logic, asking why the U.S. would both prohibit and profit from AI chip sales to China if they pose a security risk.
- Others view it as an innovative way to maintain a technological presence in China while controlling advanced technology flow.
The Commerce Department began issuing export licenses for Nvidia’s H20 chip shortly after the agreement, ending a months-long sales suspension that began in April 2025 under export control restrictions. The Biden administration had tightened these controls, but the deal brokered by former President Trump’s administration allowed a controlled resumption under strict terms.
Market Impact and Strategic Considerations
- Nvidia holds about 80% of the AI accelerator market share, making its access to China critical for sustaining growth.
- AMD, while a smaller player, seeks to boost competitiveness with newer AI chip offerings.
- Despite the 15% revenue share reducing their profit margins, access to China’s tech sector is crucial and expected to drive long-term growth.
- The funds’ final use by the U.S. government remains undecided, creating some uncertainty about the broader implications of the deal.
| Aspect | Nvidia H20 | AMD MI308 |
|---|---|---|
| Revenue share to U.S. | 15% from China sales | 15% from China sales |
| Market role | Leading AI chip accelerator, 80% market share | Smaller AI chip market participant |
| Export license status | Recently granted, post-April 2025 ban | Granted under same agreement |
| 2024 China revenue | $17 billion (13% of total sales) | $6.2 billion (24% of total sales) |
The Road Ahead for Nvidia and AMD
Nvidia CEO Jensen Huang has been proactive in negotiating with the U.S. government to reopen the Chinese market. While AMD remains quiet publicly, its involvement in the revenue-sharing deal suggests similar strategic moves to secure market presence.
As technology tensions between the U.S. and China persist, this deal may set a precedent for future trade negotiations involving advanced semiconductor technologies. It underscores the complex dynamics where economic interests, national security, and global technology competition intersect.
Stay engaged with us for the latest updates on Nvidia and AMD chip sales and the unfolding tech-trade landscape. What are your thoughts on the U.S. government’s new stake in these companies’ China revenues? Share your views below!