1. Nvidia and AMD will pay the US 15% of China chip sales for export licences.
2. China made up 13% of Nvidia’s and 24% of AMD’s revenues.
3. First known case of US firms paying revenue share for export approval.
US chipmakers Nvidia and AMD have agreed to hand over 15% of revenues from sales of certain advanced computer chips to China under an arrangement with the US government, a report by the Financial Times stated.
The deal, described by trade experts as unprecedented, is tied to the granting of export licences for high-end semiconductors such as Nvidia’s H20 and AMD’s MI308, which are used for artificial intelligence applications. It follows months of tighter restrictions on sales of cutting-edge chips to China.
In April, the Trump administration halted sales of Nvidia’s H20 to the Chinese market. However, last month the company said the US had decided to allow shipments to resume, and the Commerce Department began issuing export licences on Friday. AMD has also received approval for its China-bound AI chips.
Nvidia generated $17 billion in revenue from China in the latest financial year, accounting for 13% of total sales. AMD reported $6.2 billion from China in 2024, representing 24% of its revenue. Both firms depend on the China as a significant market for their products.
Without denying the development, a spokesperson for Nvidia replied to an email query by Reuters and said, “We follow rules the US government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”
US Commerce Secretary Howard Lutnick has previously described the H20 as Nvidia’s ‘fourth-best chip’ and said it was in America’s interest for Chinese companies to use US technology, even if the most advanced products remain restricted. He had stated that the resumption of chip sales were a part of the broader negotiations with China, including securing supplies of rare earth minerals.
According to US officials, the administration does not believe sales of the H20 and equivalent chips compromise national security. However, details on when the 15% revenue-sharing arrangement will begin, how the funds will be collected, and how they will be used have yet to be determined.
