US tech giants agree to pay 15% revenue from China chip sales in high-stakes deal
Nvidia and AMD have reached an unprecedented agreement with the United States government to pay 15 per cent of their revenues from specific chip sales in China in exchange for export licences.
The arrangement, first reported by the Financial Times, will allow Nvidia to resume selling its H20 chips and AMD to sell its MI308 chips in the Chinese market.
The deal follows the imposition of strict export controls on advanced chips to China, introduced during the Biden administration in 2023 and expanded under President Donald Trump earlier this year.
These restrictions effectively banned the sale of Nvidia’s H20 chip and similar products. Security experts have warned that such chips could enhance China’s artificial intelligence capabilities, including in military applications.
Under the new arrangement, the Trump administration will receive a percentage of revenue from each sale in China. Industry analysts describe the deal as a high-cost concession for market access, highlighting the mounting financial and strategic pressures facing US tech companies amid escalating trade tensions.
Critics in the United States have expressed concern that the agreement undermines the national security rationale for the original ban.
They argue that it sets a problematic precedent by linking export control exemptions to financial payments. Some investors have likened the move to an export tax, which is prohibited under the US Constitution.
Nvidia chief executive Jensen Huang has spent months lobbying both US and Chinese officials for a resumption of sales, meeting President Trump last week. The company has argued that maintaining US leadership in AI technology requires competing in global markets, including China.
The deal coincides with signs of easing trade tensions between the world’s two largest economies. Beijing has loosened controls on rare earth exports, while Washington has lifted some restrictions on US chip design software firms operating in China. Both sides recently agreed to a 90-day truce in their tariff dispute, although an extension beyond the 12 August deadline remains uncertain.
Meanwhile, major US technology firms have pledged significant new investments in domestic operations. Apple has announced plans to invest an additional USD100 billion in the United States, Micron Technology has committed USD200 billion to US manufacturing, and Nvidia has unveiled a USD500 billion plan to build AI servers and supercomputers entirely in the country.
