Nvidia and AMD to give US 15% of China chip revenue in unprecedented deal

Nvidia and AMD have agreed to give the US government 15% of the revenue from their chip sales in China as part of an unusual deal with the Trump administration to obtain export licenses for their semiconductors.

According to people familiar with the matter, including a US official who spoke to the Financial Times, the two chipmakers accepted this financial arrangement to receive the export licenses for the Chinese market, which were granted last week.

The US official stated that Nvidia agreed to share 15% of its revenue from H20 chip sales in China, while AMD will provide the same percentage from its MI308 chip revenues. Two people close to the deal noted that the Trump administration has not yet decided how this money will be used.

Nvidia CEO Jensen Huang reported that two days after his meeting with President Donald Trump, the Commerce Department began issuing export licenses for the H20. The US official said the administration has also started issuing licenses for AMD’s chip for China.

This reciprocal agreement is unprecedented. According to export control experts, no US company has ever agreed to pay a portion of its revenue to obtain an export license. However, the deal fits a model of the Trump administration in which the president has called on companies to take measures, such as domestic investments, to avoid the imposition of tariffs, with the goal of bringing jobs and revenue to America.

AMD did not respond to a request for comment. Nvidia did not deny that it accepted the agreement. The company stated, “We comply with the rules set by the US government for our participation in global markets.”

Based on information provided by Nvidia before the controls began earlier this year, Bernstein analysts estimate that the company will sell approximately 1.5 million H20 chips to China in 2025, generating about $23 billion in revenue.

This move follows controversy surrounding the H20 chip. Nvidia specifically designed the H20 for the Chinese market after President Joe Biden imposed strict export controls on more advanced chips used for artificial intelligence.

In April, the Trump administration announced it would ban the export of the H20 to China. However, Trump reversed his decision after meeting with Huang at the White House in June. In the following weeks, Nvidia grew concerned as the Bureau of Industry and Security (BIS), the agency within the Commerce Department that administers export controls, did not issue any licenses.

According to sources close to the matter, Huang discussed the issue with Trump on Wednesday, and BIS began issuing licenses on Friday.

The H20 revenue deal comes at a time when Nvidia and the Trump administration are facing criticism for the decision to sell the chip to China. Some security experts in the US argue that the H20 will aid the Chinese military and weaken America’s strength in artificial intelligence.

China expert Matt Pottinger, who served as deputy national security adviser during Trump’s first term, and 19 other security experts wrote a letter to Commerce Secretary Howard Lutnick, urging the US not to issue H20 licenses.

They claimed the H20 is “a tool that rapidly develops China’s leading artificial intelligence capabilities” and would ultimately be used by the Chinese military. Nvidia called these claims “false” and rejected the idea that China could use the H20 for military purposes.

On Saturday, Nvidia stated, “We have not been shipping H20 to China for months, but we hope that export control rules will allow America to compete in the Chinese and global markets. America cannot repeat the mistake it made with 5G and lose its telecommunications leadership. If we compete, America’s artificial intelligence technology can become the standard for the world.”

Debates in Washington over chip export control policy began as the US and China continued trade negotiations, which Trump hoped would pave the way for a summit with Chinese President Xi Jinping. It was previously alleged that the US Commerce Department had been instructed to freeze new export controls on China to avoid angering Beijing.