Nvidia, AMD Pay 15% Revenue Share on AI Chip Sales to China

The Trump administration reached a landmark agreement with Nvidia and AMD requiring the companies to pay the U.S. government 15% of revenues from sales of certain AI chips in China in exchange for export licenses. These chips, Nvidia's H20 and AMD's MI308, are less advanced models specifically designed for the Chinese market following Washington's 2023 export restrictions on top-tier GPUs. President Trump initially sought a 20% revenue share but accepted the negotiated 15%, emphasizing that the chips sold to China are 'obsolete' compared to U.S. offerings and that more capable AI GPUs would not be exported. While this deal allows continued sales in a key market and provides significant revenue for the U.S., critics view it as contradictory, questioning the logic of monetizing chip exports while trying to restrict China's AI advancements. Nvidia defends the arrangement as necessary to maintain U.S. industrial leadership and competitiveness, framing it as an effort to avoid losing the AI race to China. However, analysts warn that exporting these chips, even with restrictions, could accelerate China's AI development and pose long-term strategic concerns despite short-term tactical gains.