Nvidia AMD Agree to Pay US 15% China Chip Revenues for Export Licenses

Nvidia and AMD have agreed to pay the U.S. government 15% of their revenue from sales of specific AI chips in China—Nvidia's H20 and AMD's MI308—as part of export license agreements secured under the Trump administration. This unprecedented arrangement, which followed a lifting of the ban on Nvidia's H20 chip sales to China, allows the companies to continue operating in the Chinese market while complying with U.S. export controls aimed at maintaining strategic advantages in semiconductor technology. The deal has sparked controversy, with critics arguing that the U.S. government's shift from security-based export restrictions to financial levies undermines free trade principles and serves more as a revenue stream than a genuine national security measure. Nvidia has stated it follows U.S. government rules to remain competitive globally, while Chinese state media has warned consumers against using Nvidia chips, citing potential U.S. backdoors for surveillance and remote disabling. The arrangement also reflects growing tensions and competition in the semiconductor industry, especially as Chinese companies like Huawei and Cambricon expand aggressively in AI chip development. Overall, the deal highlights the complex balance between national security, economic interests, and global trade dynamics in U.S.-China relations.