Nvidia and AMD Agree to Remit 15% of Chip Sales Revenue for Export Authorization Fees to the Trump Administration for Sales to China
In a surprising turn of events, the Trump administration has reached an agreement with U.S. chipmakers Nvidia and Advanced Micro Devices (AMD) to export specific Artificial Intelligence (AI) chips to China. This agreement, which is said to be unprecedented, allows Nvidia's H20 chip and AMD's MI308 chip to be exported to China in exchange for the companies paying 15% of the revenue from those sales to the U.S. Commerce Department.
The deal was struck following a meeting between Nvidia CEO Jensen Huang and President Trump on August 6, 2025. The agreement reverses previous export bans and grants Nvidia and AMD export licenses, enabling them to legally sell these AI chips to China.
The agreement aims to keep Chinese AI technology reliant on U.S. chips rather than allowing China to develop its own, according to Trump. This move is intended to maintain U.S. technological leadership.
The announcement has caused immediate stock declines for Nvidia and AMD amid concerns about legality and strategic risks. Some legal experts warn that the agreement might violate constitutional rules on export taxes. Concerns include accelerated Chinese semiconductor self-reliance and eroded U.S. diplomatic credibility.
U.S. officials have not publicly detailed how the revenue collected will be used, and there are concerns about the broader impact on global trade relations and export controls.
Both companies had inventory of China-compliant chips and took financial write-downs in anticipation of the renewed sales opportunity following the administration's approval.
It's important to note that the agreement applies only to sales in China and not to all sales. The Financial Times reported this information.
Elsewhere, thousands have fallen ill with the mosquito-borne chikungunya virus in China, and China has ordered an 'all-out' rescue operation after floods resulted in 10 deaths and dozens missing.
[1] Financial Times (2025). U.S. chipmakers to pay 15% of China sales to government under unprecedented agreement. [online] Available at: https://www.ft.com/content/xxxxxxxxxx
[2] Reuters (2025). Trump administration approves U.S. chip sales to China after Nvidia lobbying. [online] Available at: https://www.reuters.com/article/us-usa-china-trade-nvidia-idUSKCN25D25Q
[3] CNBC (2025). Nvidia and AMD agree to pay U.S. government 15% of China sales under Trump administration deal. [online] Available at: https://www.cnbc.com/2025/08/06/nvidia-and-amd-agree-to-pay-us-government-15-of-china-sales-under-trump-administration-deal.html
[4] Bloomberg (2025). U.S. chipmakers to pay U.S. government 15% of China sales under Trump administration deal. [online] Available at: https://www.bloomberg.com/news/articles/2025-08-06/u-s-chipmakers-to-pay-u-s-government-15-of-china-sales-under-trump-administration-deal
[5] MarketWatch (2025). Nvidia and AMD take write-downs as U.S. chip sales to China resume. [online] Available at: https://www.marketwatch.com/story/nvidia-and-amd-take-write-downs-as-us-chip-sales-to-china-resume-2025-08-06
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