NVIDIA and AMD pay 15% of Chinese chip sales to the U.S. government

The BBC was told that Chip Giants Nvidia and AMD have agreed to pay 15% of China’s revenue to the U.S. government as part of a “unprecedented” deal to secure export licenses to China.

The United States has previously banned the sale of powerful bargaining chips used in regions such as artificial intelligence (AI) to China under export controls usually associated with national security issues.

Security experts, including some who served during the presidency of Donald Trump, Recently, I wrote to the government, expressing my “deep attention” NVIDIA’s H20 chip is an “effective accelerator” of China’s AI functions.

“We comply with the rules of participation of the U.S. government in the global market,” NVIDIA told the BBC.

It added: “While we haven’t shipped H20 to China for several months, we hope export control rules will allow the United States to compete in China and globally.”

AMD did not immediately respond to a request for comment. The White House declined to comment.

Under the agreement, NVIDIA will pay 15% of its revenue from China’s H20 chip sales to the U.S. government.

AMD will also give 15% of revenue generated from China’s MI308 chip sales to the Trump administration, the Financial Times first reported.

After the Biden administration imposed U.S. export restrictions in 2023, the H20 chip was developed specifically for the Chinese market. In April this year, the Trump administration effectively banned its sale.

NVIDIA CEO Jensen Huang spent months lobbying both sides to restore sales of Chinese chips. He reportedly met with U.S. President Donald Trump last week.

“You either have national security issues or you don’t,” said Deborah Elms, director of trade policy at the Hinrich Foundation.

She added: “If you have 15% payment, it won’t somehow eliminate national security issues.”

In a letter to U.S. Commerce Secretary Howard Lutnick last month, a panel of 20 security experts said that while NVIDIA’s biggest buyer of H20 chips is Chinese civilian companies, they hope they will be used by the military.

“Chips optimized for AI reasoning will not only power consumer products or factory logistics; they will enable rapid advances in automated weapon systems, intelligence surveillance platforms, and battlefield decision-making,” they wrote.

“The United States cannot repeat 5G and lose telecom leadership. If we compete, the U.S. AI technology stack could be the standard in the world,” NVIDIA said in a statement to the BBC.

Charlie Dai, vice president and chief analyst at global research firm Forrester, said the deal to hand over more than 15% of Chinese chip sales to the U.S. government in exchange for an export license is “unprecedented.”

He added: “The arrangement highlights the high cost of market access amid escalating technology trade tensions, bringing huge financial pressure and strategic uncertainty to technology suppliers.”

As trade tensions between Beijing and Washington eased, chip sales resumed to China.

Beijing has easily controlled rare earth exports, while the United States has lifted restrictions on chip design software companies operating in China.

In May, the world’s two largest economies agreed to a 90-day truce in the tariff war.

Since then, senior trade officials from both sides have met several times, although an agreement to extend the tariff has not been confirmed before the August 12 deadline.

As part of his trade policy, Trump has put pressure on major companies to invest more in the United States.

last week, Apple says it will invest another $10 billion (£74.4 billion) in the country, adding to the promise of previously spending $50 billion in the U.S. in the next four years.

In June, Memory Chip Maker Micron Technology said its planned U.S. investment total would reach $200 billion. This includes the construction of a new manufacturing plant in Idaho.

NVIDIA itself announced plans to build AI servers in the United States, worth up to $50 billion, and promised to build AI supercomputers that are completely made in the United States.

Meanwhile, the Wall Street Journal reported that the president called for an immediate resignation due to ties with China, and Intel’s boss will meet with Trump at the White House.

Last week, Trump said on social media that Lip-Bu Tan was “highly conflicted” and apparently refers to what he said about the investment in the U.S. in the U.S. company is related to the Chinese military.

Mr. Tan pushed back and said it was “wrong information”.