The ongoing U.S.–China technology rivalry just took an unexpected turn. Nvidia and AMD will give the U.S. government 15% of their chip sales revenue from China. This China chip export deal is part of an unusual agreement with the U.S. Commerce Department to secure export licenses for their AI processors.
A First-of-its-Kind Chip Sales Arrangement
Under the deal, Nvidia will share 15% of sales from its H20 chips in China, while AMD will do the same for its MI308 chips. These licenses came only days after Nvidia CEO Jensen Huang met with President Donald Trump.
Notably, export control experts say this is the first time a U.S. company has given part of its revenue to obtain export licenses. Moreover, the government has not yet revealed how it will use the funds. Nevertheless, the arrangement fits a pattern where the administration links corporate permissions to economic benefits for America.
According to Bernstein analysts, Nvidia could sell 1.5 million H20 chips in China in 2025, generating about $23 billion. Therefore, at 15%, the U.S. could gain billions of dollars from this single agreement.
Political Context and Industry Response
Earlier this year, the Trump administration banned H20 exports to China. However, that decision reversed some restrictions introduced under President Joe Biden. Eventually, after Huang’s White House meeting, the Bureau of Industry and Security (BIS) began issuing export licenses.
Critics warn that the H20 chip could boost China’s military AI programs. Even so, Nvidia rejects these claims as “misguided,” insisting the chip is for commercial use. Additionally, the company argues that America must stay competitive in China’s fast-growing AI market. It also warns against repeating the 5G technology setback.
This China chip export deal comes as U.S.–China trade talks continue. Furthermore, Beijing is pushing for looser rules on high-bandwidth memory (HBM) chips, which are vital for advanced AI. Ultimately, the outcome of this debate could reshape global technology policy.
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