Nvidia and AMD will reportedly pay 15% of their Chinese revenue to the US government so they can sell AI-capable chips there, despite warnings from security experts
According to the Financial Times, Nvidia and AMD have joined together in an unprecedented trade agreement that will see them pay the US government 15% of revenue from their chip sales in China. In return, the two tech giants will gain the export licenses they need to sell semiconductors in the Chinese Market.
It's specifically Nvidia's H20 chips and AMD's MI308 they're looking to sell, and which the 15% tariff will be paid on.
The H20 chip has been controversial, and was the cause of former President Joe Biden instituting export controls on advanced chips that could be used for artificial intelligence. One US politician went so far as to suggest adding trackers that would brick chips that ended up in China. As the Financial Times reports, "US security experts say the H20 will help the Chinese military and undermine US strength in artificial intelligence." Nvidia responded to call these claims "misguided".
A Commerce Department adviser for the Biden administration, Alasdair Phillips-Robins, was quoted by Reuters as saying, "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury".
There was talk of banning exports of H20 chips to China from the Trump administration back in April. They came to nothing, however, after Nvidia's CEO Jensen Huang met with President Donald Trump personally in June.
Trump, who admitted he hadn't even heard of Nvidia previously, quickly became Huang's biggest fan. Speaking at an AI summit in July, Trump called Huang a "great guy" and claimed he had 100% market share and Nvidia was impossible to catch up to.
Nvidia's Chinese revenue last year came to $17 billion, which was 13% of its total sales. AMD numbers from 2024 show it earning $6.2 billion in revenue from China, which came to 24% of its total revenue.