NextFin news, On August 11, 2025, U.S. semiconductor companies Nvidia and Advanced Micro Devices (AMD) reached an unprecedented agreement with the Trump administration in Washington, D.C., to pay 15% of their revenue generated from sales of advanced artificial intelligence (AI) chips in China to the U.S. government.
The deal allows Nvidia and AMD to obtain export licenses for their AI chips, including Nvidia's H20 chip and AMD's MI308 chip, enabling them to resume sales in the Chinese market after a halt imposed earlier in the year. The Trump administration had stopped sales of these chips to China in April 2025 but reversed course following this agreement.
According to a White House official and multiple news reports including ABC News, The Financial Times, and CBS News, the revenue-sharing arrangement is highly unusual and marks a significant intervention by the U.S. government in corporate affairs. The companies will remit 15% of the revenue from their China sales to the U.S. Treasury as a condition for receiving export licenses.
Nvidia, headquartered in Santa Clara, California, reported $17 billion in revenue from China for the fiscal year ending January 26, 2025, representing 13% of its total sales. AMD reported $6.2 billion in revenue from China in 2024, accounting for 24% of its total revenue.
Commerce Secretary Howard Lutnick stated in July 2025 that the AI chips allowed for export to China are not the most advanced models, describing Nvidia's H20 chip as its "fourth-best" product. The administration maintains that the sale of these chips does not compromise U.S. national security.
The agreement was announced amid ongoing U.S.-China trade tensions and efforts by both countries to maintain technological leadership in AI. China’s foreign ministry has repeatedly criticized U.S. export controls as attempts to suppress Chinese technological development.
Industry experts and former U.S. export officials have expressed concerns about the deal. Christopher Padilla, a former export control official, described the arrangement as "unprecedented and dangerous," suggesting it resembles "bribery or blackmail." Alasdair Phillips-Robins, a former Commerce Department adviser, criticized the move as trading national security protections for government revenue.
Nvidia declined to comment directly on the revenue-sharing terms but stated it follows U.S. government rules for participation in global markets and hopes export controls will allow American companies to compete worldwide. AMD did not immediately respond to requests for comment.
The Trump administration has also taken other actions to influence U.S. tech companies, including demanding the resignation of Intel CEO Lip-Bu Tan over alleged conflicts of interest related to China ties.
This revenue-sharing deal represents a novel approach by the U.S. government to regulate high-tech exports and generate income from American companies’ sales in China, reflecting the complex interplay of trade, national security, and technology competition between the two countries.
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