Leading chipmakers Nvidia and Advanced Micro Devices (AMD) have agreed to the deal in order to secure export licences to China.
Nvidia (NVDA) and Advanced Micro Devices (AMD) will pay the US government 15% of their Chinese revenues for certain advanced chips. The agreement has been made to ensure that US export licences were granted to sell high-performance semiconductors to Chinese customers.
The deal with the US chipmakers covers Nvidia’s H20 chip and AMD’s MI308 chip, both used in artificial intelligence applications. These leading chips were previously restricted under strict export controls, with US officials citing national security concerns.
Under this new arrangement, both companies will be able to resume sales but must surrender 15% of related Chinese revenues. It is currently unclear as to how the US government plans to use the collected funds.
What have Nvidia and AMD said about the deal?
When approached for comment, Nvidia stated that it meets all existing US trade rules for global markets. In a statement, the company 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.”
For several months, Nvidia’s chief executive Jensen Huang has lobbied for the Trump administration to restart sales to China. He recently met with the US president as part of efforts to persuade him to ease restrictions.
Meanwhile, AMD has so far chosen not to comment publicly on the agreement. Similarly, the White House and US Commerce Department has also declined to provide a detailed response.
How did we get here in the first place?
It has been a challenging period for Nvidia and AMD as company bosses responded to fast-moving US trade policy. Throughout 2025, Donald Trump has put pressure on major companies within the semiconductor industry to increase their US-based investments.
Earlier this year, the US government announced it would be pausing sales of Nvidia’s H20 chip to China. The ban, introduced in April, followed earlier export limits that were introduced by the Biden administration back in 2023.
While Nvidia had designed the H20 specifically for China after those earlier restrictions, shipments stopped when the ban was extended. Additionally, AMD’s MI308 has faced similar export challenges amid tightened US technology trade rules.
In agreeing to pay a 15% share of their Chinese revenues, the two companies have entered into an unprecedented agreement. Very rarely in modern corporate history have export controls imposed financial penalties tied to specific markets, rather than limiting sales.
The importance of China to Nvidia and AMD
China remains a major market for both firms, representing significant portions of their annual revenues. Nvidia generated $17 billion in Chinese sales last year, while AMD earned a total of $6.2 billion.
However, Nvidia had been unable to ship $2.5 billion of H20 China revenue in the quarter ending 27 April because of the previous rules. Based on these figures, it would have achieved more than $7 billion in H20 sales to China during the period.
Moreover, AMD could generate $3 billion to $5 billion of 2025 revenue if restrictions were lifted, according to Morgan Stanley estimates. This strong potential highlights just how valuable the Chinese market remains despite ongoing political and trade tensions.
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