nvidia, amd to pay us government 15% on china chip sales

2025-08-11 nvidia

Washington, Monday, 11 August 2025.
nvidia and amd will reportedly pay 15% of their china chip revenue to the us government to secure export licenses. this agreement occurs amidst ongoing us-china trade discussions and export restrictions on advanced chips. this arrangement impacts nvidia and amd’s ability to sell microprocessors, tailored to comply with biden-era ai chip export restrictions, to the chinese market. the financial impact could be significant, potentially generating over $2 billion for the us government, with nvidia alone expected to contribute substantially from its h20 chip sales in china.

agreement details

Nvidia and AMD have reportedly agreed to allocate 15% of their revenue from Chinese chip sales to the U.S. government to secure export licenses [1]. This agreement surfaces amid ongoing discussions between the U.S. and China about trade, coupled with existing export limitations on advanced chips [1]. The deal affects the ability of Nvidia and AMD to market tailored microprocessors to China, specifically those designed to meet the AI chip export restrictions implemented during the Biden administration [1].

financial implications for nvidia

Bernstein analysts estimate Nvidia’s H20 chip sales in China could reach $15 billion by year-end [4]. The 15% levy could provide over $2 billion in revenue for the U.S. government [4][7]. Nvidia’s stock performance may be affected by these financial obligations [1]. This arrangement makes the U.S. government a de facto partner in Nvidia’s Chinese operations [4]. The unusual nature of this agreement reflects the Trump administration’s interventionist approach to international business deals involving American companies [4].

market position and competition

The U.S. government’s policy reversal, allowing the export of AI chips, impacts the competitive landscape [4]. Nvidia’s CEO, Jensen Huang, argued that a ban would hurt American tech companies, potentially allowing Huawei to dominate China’s AI chip market [4]. Huang advocated for allowing Nvidia and AMD to compete, using profits from the Chinese market to fund further development [4]. However, some national security officials view this policy shift as a strategic misstep, potentially strengthening China’s AI capabilities [4].

china’s perspective and concerns

China is pushing the U.S. to relax export controls on critical AI chip components, viewing it as essential for a trade deal [3][5]. Chinese officials have expressed concerns that restrictions on high-bandwidth memory (HBM) chips hinder their ability to develop domestic AI chips [3][5]. Some experts worry that easing these controls would benefit companies like Huawei and SMIC, enabling them to produce millions of AI chips annually [3]. This situation highlights the complex balance between economic interests and national security concerns [2][4].

expert opinions and analysis

Experts have voiced concerns about the long-term implications of this agreement [2][4]. Liza Tobin, former China director at the National Security Council, suggests this move could encourage China to pressure for more concessions [4]. Ilaria Carrozza, a senior researcher at the Peace Research Institute Oslo, questions the credibility of export controls if they can be bypassed with a fee [2]. Howard Lutnick, U.S. Commerce Secretary, believes it is in the U.S.’s interest for China to use American technology [2].

Bronnen

china trade chip export controls