NVIDIA and AMD Strike Unprecedented 15% China Chip Deal with US

NVIDIA and AMD have reached a groundbreaking agreement with the U.S. government, marking a first in the tech industry. In exchange for export licenses, both companies will pay 15% of their revenue from AI chip sales in China. The deal covers NVIDIA’s H20 AI accelerator and AMD’s MI308 chips, following direct negotiations between Nvidia CEO Jensen Huang and former President Donald Trump. While the companies view this as a strategic move to maintain their foothold in the Chinese market, critics argue it monetizes U.S. trade policy at the expense of national security.

The TRUMP administration’s reliance on tariffs to reshape U.S.-China trade relations takes a new turn with this revenue-sharing model. Earlier threats of 100% tariffs on imported chips unless manufactured domestically now give way to a more nuanced approach. Instead of outright bans, the U.S. government becomes a direct beneficiary of tech sales to China. Proponents claim it balances market access with domestic revenue growth, while opponents warn of compromising security for profit.

This 15% revenue-sharing mechanism functions as a de facto tariff but targets corporate earnings rather than imports. No precedent exists for U.S. companies surrendering a portion of revenues to secure export licenses. Trade experts remain divided—some hail it as innovative policy, others as a risky departure from traditional safeguards.