Nvidia, AMD to pay US 15% of China AI chip sales under export deal

US chipmakers Nvidia and AMD have agreed to hand over 15 per cent of their revenues from sales of certain advanced artificial intelligence chips to China, as a condition for obtaining export licences, according to a US official quoted by Reuters. The arrangement covers products such as Nvidia’s H20 chips and AMD’s MI308 processors, high-performance semiconductors designed for AI applications. The Financial Times first reported the deal on Sunday, saying the Trump administration has yet to decide how the collected funds will be used.

Sales ban lifted after April halt

In April, Washington halted sales of Nvidia’s H20 chips to China over export control concerns. However, Reuters reports that the US government last month gave Nvidia the green light to resume sales, with deliveries expected to begin soon. The Commerce Department began issuing export licences for the H20 last week.

A Nvidia spokesperson told Reuters the company “follows rules the US government sets for our participation in worldwide markets” and expressed hope that export control rules would allow America to “compete in China and worldwide.” AMD did not comment on the report.

Balancing national security and market access

The unusual revenue-sharing requirement has drawn mixed reactions. Geoff Gertz, a senior fellow at the Center for New American Security, told Reuters the policy seemed contradictory: “Either selling H20 chips to China is a national security risk, in which case we shouldn’t be doing it, or it’s not, in which case why are we putting this extra penalty on the sale?” Commerce Secretary Howard Lutnick has defended the move, calling it part of broader US–China negotiations over access to rare earths.

In an interview with CNBC last month, Lutnick described the H20 as Nvidia’s “fourth-best chip” and said it was in US interests for Chinese companies to use American technology, even if the most advanced designs remain banned from export. A US official told Reuters the administration does not view the sale of H20 or similar chips as a compromise to national security. However, critics like Alasdair Phillips-Robins, a former adviser at the Commerce Department during Joe Biden’s presidency, argue the deal trades away “national security protections for revenue for the Treasury.”

AI chip sales remain a geopolitical flashpoint

The export of high-end semiconductors to China remains a core battleground in US–China trade and tech relations. While Washington has tightened restrictions on the most advanced AI chips, it is also seeking to maintain market share for American firms in China’s lucrative technology sector.

With the 15 per cent revenue arrangement now in place, the Trump administration is attempting to walk a fine line, leveraging technology access for strategic gains, while keeping a close eye on national security thresholds.

(With inputs from the agencies)