US Slaps Nvidia & AMD with 15% China AI Chip Export Tax – Tech Cold War Escalates
The Biden administration just fired the next shot in the semiconductor arms race. Nvidia and AMD face immediate 15% tariffs on AI chip exports to China—a move that'll send shockwaves through data centers from Shenzhen to Silicon Valley.
Wall Street's already placing bets: will this accelerate China's homegrown chip industry or just line the pockets of customs brokers? Either way, grab your popcorn—the chip wars just got a 15% more expensive.
Nvidia AMD Chip Sales Resume With 15% US Cut Amid Market And Export Rules
The agreement was confirmed by a US official who said that both Nvidia and AMD have consented to give the US government 15% of revenue from sales to China of advanced computer chips used for artificial intelligence applications. This deal specifically covers chips like Nvidia’s H20 and AMD’s MI308 semiconductors.
Trump Administration Halts Then Reverses H20 Sales Ban
The Trump administration had instituted a halt on Nvidia AMD chip sales back in April, specifically targeting Nvidia’s H20 chips destined for China. Right now, both companies have engineered an agreement to the 15% revenue cut as a condition for obtaining export licenses, according to several key officials who spoke with Reuters.
A US official said:
The Commerce Department has accelerated the process of issuing licenses for H20 chip sales, with the Nvidia 15% arrangement actually allowing companies to resume deliveries across multiple essential market segments. When questioned about the Nvidia 15% revenue requirement, a Nvidia spokesperson Leveraged a measured response:
The spokesperson also added:
Expert Criticism Over Nvidia AMD Chip Sales Policy
The US chip export rules have spearheaded criticism from numerous significant policy experts along with questions about their strategic logic. Geoff Gertz, who serves as a senior fellow at the Center for New American Security, transformed the discussion by calling the situation “wild” and questioned the reasoning behind allowing Nvidia and China chip sales resume under these particular conditions.
Gertz stated:
Alasdair Phillips-Robins, a former Commerce Department adviser, revolutionized the critique by addressing the approach even more directly. Phillips-Robins said:
Commerce Secretary Defends Nvidia AMD Chip Sales Strategy
US Commerce Secretary Howard Lutnick pioneered the defense of this decision as part of broader negotiations with China. Lutnick architected the explanation during a recent interview, actually characterizing the H20 as Nvidia’s “fourth-best chip” across certain critical technology tiers.
Lutnick said it was in the US interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American “tech stack.”
The US chip export rules have optimized the balance between security and economic interests through various major strategic considerations. At the time of writing, AMD stock continues to be monitored as investors deploy assessment strategies for the impact of these new requirements on company profitability.
A US official confirmed that the administration doesn’t believe the Nvidia 15% arrangement compromises national security, though implementation details remain under development across several key regulatory frameworks. Chipmakers integrated this condition for obtaining export licenses, with the Trump administration yet to establish how they will actually utilize the collected revenue.
The US official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising US national security. The official did not know when the administration WOULD implement the agreement or exactly how, but said the administration would be in compliance with the law.
