Nvidia, AMD agree to give US 15% of China chip revenues

Nvidia and AMD have agreed to give the US government 15 per cent of revenues from certain chip sales in China, in an unusual arrangement with the Trump administration to secure export licences.

People familiar with the matter, including a US official, told The Financial Times the deal was a condition for the two companies to obtain export licences for the Chinese market, granted last week. 

Nvidia will provide 15 per cent of revenues from sales of its H20 chip in China, while AMD will do the same for its MI308 chip. The US official said the administration has not yet decided how to use the funds.

The Financial Times noted that the US Commerce Department began issuing H20 export licences on August 8, two days after Nvidia chief executive Jensen Huang met President Donald Trump. Licences for AMD’s chip have also begun to be issued.

Export control experts told the FT the revenue-sharing arrangement is unprecedented, with no prior instance of a US company agreeing to hand over a portion of its earnings in exchange for export licences. The move aligns with a broader pattern in the Trump administration of urging companies to make concessions — such as domestic investments — to avoid tariffs and generate revenue for the US.

AMD did not respond to a request for comment. Nvidia did not deny the deal, stating: “We follow rules the US government sets for our participation in worldwide markets.”

Bernstein analysts estimate that, based on Nvidia’s earlier guidance, the company would have sold around 1.5mn H20 chips to China in 2025, generating approximately $23bn in revenue before the export controls took effect.

The H20 chip has been at the centre of political controversy. Nvidia designed it for the Chinese market after the Biden administration imposed strict export controls on more advanced AI chips. In April, the Trump administration announced it would ban H20 exports to China, but Trump reversed the decision in June after meeting Huang at the White House.

People familiar with the matter told the FT that Huang again raised the issue with Trump on August 6, prompting the Bureau of Industry and Security (BIS) — which oversees export controls — to begin issuing licences on August 8.

The arrangement has drawn criticism from US security experts, who warn that the H20 could bolster China’s military and weaken US advantages in artificial intelligence.

“Beijing must be gloating to see Washington turn export licences into revenue streams,” said Liza Tobin, a China expert at the Jamestown Foundation who served on the National Security Council during Trump’s first term. “What’s next — letting Lockheed Martin sell F-35s to China for a 15 per cent commission?”

Several BIS officials have also voiced concerns over the decision. In a letter to Commerce Secretary Howard Lutnick, former deputy national security adviser Matt Pottinger and 19 other experts urged the administration not to approve H20 licences, calling the chip a “potent accelerator of China’s frontier AI capabilities” that would ultimately serve the Chinese military.

Nvidia rejected those claims as “misguided” and said it does not believe China could use the H20 for military purposes. “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,” the company said on August 9.

The FT reported that the debate over export controls comes as the US and China hold trade talks aimed at paving the way for a potential Trump–Xi summit. The Commerce Department has reportedly been told to freeze new export controls on China to avoid antagonising Beijing, which is also pressing for the relaxation of restrictions on high-bandwidth memory chips — a key component in advanced AI chip production.

By Sabina Mammadli