Nvidia and AMD Agree to Pay U.S. 15% of China Chip Sales Revenue
Nvidia and AMD have agreed to give the U.S. government 15% of revenue from advanced computer chip sales to China, a U.S. official told Reuters on Sunday. These chips include Nvidia’s H20, used for artificial intelligence applications.
H20 Sales Ban and Resumption
The Trump administration halted H20 sales to China in April. However, last month Nvidia announced that U.S. authorities had cleared it to resume shipments, with deliveries expected soon.
On Friday, another U.S. official confirmed that the Commerce Department had started issuing licenses for H20 sales to China.
When asked about the 15% revenue agreement, a Nvidia spokesperson said, “We follow the rules the U.S. government sets for our participation in worldwide markets.” The spokesperson added that Nvidia had not shipped H20 chips to China for months but hoped export rules would allow the U.S. to remain competitive globally.
AMD did not comment on the news, first reported by the Financial Times. The U.S. Department of Commerce and China’s foreign ministry also did not respond to requests for comment.
China a Key Market for Both Chipmakers
China is a major market for both companies. In the fiscal year ending January 26, Nvidia generated $17 billion from China, making up 13% of its total revenue. In 2024, AMD earned $6.2 billion from China, representing 24% of its total sales.
The Financial Times reported that the 15% arrangement was a condition for securing export licenses for chips, including AMD’s MI308. The U.S. government has yet to decide how the revenue will be used.
National Security Debate
Some industry experts criticized the move. Geoff Gertz, senior fellow at the Center for New American Security, said the arrangement was 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 a risk, in which case, why impose the extra penalty?”
U.S. Commerce Secretary Howard Lutnick previously said resuming H20 sales was part of broader U.S.-China negotiations over rare earth supplies. He described the H20 as Nvidia’s “fourth-best chip” and argued it was in U.S. interests for Chinese firms to keep using American technology, even if the most advanced versions remain banned.
The U.S. official added that the administration does not consider selling H20 and equivalent chips a national security threat. Details on when and how the agreement will be implemented remain unclear.
Political Criticism
Alasdair Phillips-Robins, former adviser at the Commerce Department under President Joe Biden, criticized the deal. He said it suggested the administration was “trading away national security protections for revenue for the Treasury.”
