Nvidia and AMD have agreed to give the US government 15% of their revenue from advanced chips sold to China in exchange for export licences to the key market, in an unprecedented deal that appears to reverse national security restrictions. The arrangement, first reported by the Financial Times, signals a potential easing in the US-China trade war, though it has raised constitutional concerns.
Under the deal, Nvidia will pay 15% of revenue from Chinese sales of its H20 chips, and AMD will pay 15% from sales of its MI308 chips, according to reports citing US officials. The H20 and MI308 chips were banned from sale to China in April, despite the H20 being designed to comply with earlier restrictions. Last month, President Donald Trump rolled back the bans, and the commerce department began issuing export licences for the H20, a move linked to China's easing of rare earth export restrictions and this revenue-sharing agreement.
Nvidia's chief executive, Jensen Huang, had lobbied to address the restrictions, meeting Trump as recently as Wednesday. In a statement, Nvidia said: 'We follow rules the US government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.'
The deal has alarmed analysts. Peter Harrell, a former Biden administration official, said: 'In addition to the policy problems with just charging Nvidia and AMD a 15% share of revenues to sell advanced chips in China, the US constitution flatly forbids export taxes.' Ilaria Carrozza of the Peace Research Institute Oslo warned that the deal threatens the credibility of export controls, as other nations may question their enforceability.
A truce in the US-China tariff war is due to end on Tuesday, with no extension yet announced. Goldman Sachs noted that US companies have absorbed most tariff costs so far, but consumers are expected to bear 67% of costs soon, up from 22% in June.
