Nvidia Corp. and Advanced Micro Devices Inc. have agreed to give the U.S. government 15% of their revenues from advanced semiconductor sales to China in exchange for export licenses, according to U.S. officials and multiple media reports, in an unusual deal linking corporate sales to federal revenue.
The arrangement, first reported by the Financial Times, would apply to Nvidia's H20 chips and AMD's MI308 chips-products designed to meet U.S. export control limits while still appealing to Chinese customers. Both companies have sought permission to resume shipments after the Trump administration halted H20 exports to China in April. Licenses have now been issued, officials said, though details of the levy's implementation remain unsettled.
"We follow rules the U.S. government sets for our participation in worldwide markets," an Nvidia spokesperson said. "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD declined to comment.
The Chinese market remains critical to both chipmakers. Nvidia reported $17 billion in revenue from China in its last fiscal year, representing 13% of total sales. AMD recorded $6.2 billion in China revenue in 2024, or 24% of total revenue. Bernstein analysts estimate the 15% remittance could reduce gross margins on these chips by 5 to 15 percentage points, trimming overall company margins by roughly one percentage point.
Trump administration officials have said the H20 and MI308 are not top-tier AI chips capable of training large language models, but could still pose national security concerns. U.S. Commerce Secretary Howard Lutnick described the H20 as Nvidia's "fourth-best chip" and said keeping Chinese firms reliant on American "tech stacks" serves U.S. interests.
The levy comes as Washington and Beijing approach an August 12 deadline to extend a trade truce that reduced triple-digit tariffs. Technology access-particularly high-end AI chips-has emerged as a key bargaining point in the broader negotiations, which could culminate in a Trump-Xi summit.
China's state-affiliated social media outlet Yuyuan Tantian warned Sunday that the H20 could contain "backdoors" affecting function and security, echoing past U.S. accusations about Chinese tech firms like Huawei. "When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it," the commentary stated.
Nvidia has denied the allegations, saying in a recent blog post that its products have no back doors, spyware, or kill switches, and that embedding such features would "be a gift to hackers and hostile actors." China's cybersecurity regulator recently summoned Nvidia over alleged "tracking and positioning" and "remote shutdown" capabilities in its chips.
