Nvidia and AMD have reportedly agreed to allocate 15% of their revenues from chip sales in China to the US government, a condition set by the Trump administration for the issuance of export licences for these semiconductors.
This arrangement was confirmed by sources familiar with the matter, including a US official, reported Financial Times.
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According to the US official, Nvidia will contribute 15% of its revenues from H20 chip sales in China, while AMD will do the same for its MI308 chip revenues.
The Trump administration has yet to decide how to utilise the funds generated from this agreement.
Financial Times reported that the US commerce department began issuing H20 export licences shortly after Nvidia CEO Jensen Huang met with President Donald Trump. Licences for AMD’s chips were also reportedly granted around the same time.
This financial arrangement is unprecedented, as export control experts note that no US company has previously agreed to pay a portion of their revenues in exchange for export licences, stated the news agency.
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By GlobalDataHowever, it aligns with a trend during the Trump administration, where companies are encouraged to undertake initiatives, such as domestic investments, to avoid tariffs and contribute to job creation and revenue generation in the US.
While AMD did not respond to requests for comment, Nvidia acknowledged the arrangement, stating: “We follow rules the US government sets for our participation in worldwide markets.”
This development follows previous controversies surrounding the H20 chip. Nvidia customised the H20 for the Chinese market after President Joe Biden imposed stringent export controls on more advanced chips utilised in artificial intelligence.
In April, the Trump administration announced a ban on H20 exports to China, but this decision was reversed in June following Huang’s meeting with Trump. Concerns arose for Nvidia as the Bureau of Industry and Security (BIS) had not issued any licences for weeks.
Huang reportedly raised the licencing issue with Trump, leading to the issuance of licences shortly thereafter.
Nvidia stated: “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”
The ongoing debate in Washington regarding export control policies for chips coincides with US-China trade discussions, which Trump hopes will lead to a summit with President Xi Jinping.
Reports indicate that the commerce department has been instructed to halt new export controls on China to avoid straining relations with Beijing, particularly as China advocates for the relaxation of controls on high-bandwidth memory chips, essential for the production of advanced AI chips.
