Nvidia and AMD have reportedly agreed to give the U.S. government 15% of the revenue from the sale of their advanced AI chips to China. This comes as the Trump administration recently reversed a ban, allowing sales of chips like Nvidia’s H20 to resume.
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The arrangement was first reported by the Financial Times and confirmed by a U.S. official. The agreement is a condition for the companies to obtain export licenses for their semiconductors, which also includes AMD’s MI308 chips. A spokesman for Nvidia stated, “We follow rules the U.S. government sets for our participation in worldwide markets.” AMD did not respond to a request for comment.
The decision has sparked debate among policy experts. Geoff Gertz, a senior fellow at the Center for New American Security, called the move “wild,” questioning whether the chips are a national security risk. “Either selling H20 chips to China is a national security risk… or it’s not a national security risk, in which case, why are we putting this extra penalty on the sale?” he said.
Former Commerce Department adviser Alasdair Phillips-Robins also criticized the move, suggesting the administration is “trading away national security protections for revenue for the treasury.”
The U.S. official who confirmed the agreement said the administration does not believe the sale of the H20 and equivalent chips compromises national security. Commerce Secretary Howard Lutnick previously stated that the resumption of sales was part of a larger negotiation with China and described the H20 as Nvidia’s “fourth-best chip.”
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Lutnick explained that it is in the U.S.’s interest for Chinese companies to continue using American technology, even if the most advanced chips are prohibited. This ensures they remain dependent on an American “tech stack,” which the U.S. can monitor and influence.
The agreement comes at a crucial time for both chipmakers, as China represents a significant market for them. Nvidia generated $17 billion in revenue from China in the last fiscal year, while AMD reported $6.2 billion in revenue.
