From Ban to Profit-Sharing: How the US Struck a Deal with Nvidia and AMD on China Chip Sales

In a landmark arrangement, the US government will take a 15% share of sales.

That Nvidia and AMD make in China for certain advanced AI chips—part of a deal allowing the companies to resume exports that were previously banned over national security concerns.

How the Deal Works
Under the agreement, Nvidia will give 15% of its China revenue from H20 AI chip sales to the US government, while AMD will do the same for its MI308 chip. Both processors are among the most powerful for AI and supercomputing applications. These payments apply only to products requiring special export licences, not all chips sold in China.

The funds will be directed toward US chip research, technology security, and export control enforcement. Both companies must maintain detailed sales records and report them regularly to US authorities.

Why It’s Unprecedented
The US has long restricted sales of its most advanced chips to China to prevent their use in strengthening Chinese military capabilities. But a blanket ban risked harming US companies financially and boosting Chinese competitors. This profit-sharing approach creates a middle ground—allowing sales but ensuring Washington benefits directly.

Industry experts call it an “unprecedented” trade-off that may put pressure on tech companies while creating strategic uncertainty. Critics argue the deal blurs the line between national security and commercial interest, noting that a 15% payment doesn’t erase potential security risks.

Political Context
The H20 chip was designed specifically for China after the Biden administration’s 2023 export restrictions. However, it was later banned under the Trump administration earlier this year. Nvidia’s CEO Jensen Huang reportedly lobbied extensively in both Washington and Beijing to restore sales, even meeting President Donald Trump last week.

The deal comes amid signs of easing US–China trade tensions, with both sides making concessions, including a rare earth export control relaxation by Beijing and lifted US restrictions on certain chip design software.

Why Nvidia and AMD Are Key to China
These companies supply hardware critical to training large AI models and powering high-performance computing systems. Without chips like the H20 and MI308, China’s AI progress could slow, giving the US and its allies more time to strengthen their lead.

Looking Ahead
For Washington, the deal represents a new model for managing sensitive technology exports while generating revenue. If successful, similar arrangements could extend to other strategic sectors like green tech or biotechnology. For China, the agreement underscores that access to top-tier US tech now comes with higher political and financial costs.

This 15% revenue-sharing model may be the first of its kind, but it’s unlikely to be the last.