Nvidia and AMD to give U.S. 15% of China chip sales in landmark export deal

Nvidia and AMD have agreed to pay the U.S. government 15% of their revenues from certain chip sales to China as part of an unprecedented deal to regain export licences. The agreement covers Nvidia’s H20 chip and AMD’s MI308, both designed for artificial intelligence applications and previously blocked from sale under national security export controls. The H20 was created for the Chinese market after restrictions were introduced in 2023, but the Trump administration banned its sales in April this year.

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U.S. security experts have expressed concern that these chips could boost China’s military capabilities, powering autonomous weapons, surveillance systems, and battlefield AI decision-making. Nvidia has defended its compliance with government rules, with CEO Jensen Huang lobbying for a resumption of sales and recently meeting President Trump. Critics, however, argue that charging a fee does not eliminate the underlying security risks.

The move comes during a tentative easing of U.S.-China trade tensions. Beijing has eased rare earth export controls, while Washington has relaxed restrictions on some chip design software. Both sides have agreed to a temporary 90-day truce in their tariff dispute, though no extension has yet been confirmed ahead of an August 12 deadline.

Analysts say the 15% revenue-sharing agreement is unprecedented, highlighting the rising costs of market access in the midst of escalating U.S.-China tech competition. For Nvidia and AMD, China remains a crucial market, particularly for AI and high-performance computing products. Yet the arrangement also creates strategic uncertainty as future restrictions remain possible.

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The Biden administration’s 2023 export controls aimed to limit China’s access to advanced AI chips, citing security risks. The Trump administration’s ban on Nvidia’s H20 and AMD’s MI308 reinforced these measures earlier this year. Beijing has condemned such restrictions as “unilateral bullying” and abuse of export control powers.

Beyond Nvidia and AMD, the broader U.S. semiconductor industry is facing increased pressure to invest domestically. Apple recently pledged an additional $100 billion in U.S. investments, Micron Technology committed $200 billion for new facilities, and Nvidia announced plans for $500 billion worth of AI server projects to be built entirely in the U.S.

Meanwhile, Intel CEO Lip-Bu Tan is expected to meet with Trump following calls for his resignation over alleged China ties, which he denies. As both nations weigh economic and security priorities, the chip sales deal could set a precedent for how future high-tech trade with China is managed.