United States experiences a 15% revenue share from its chip exportations to China.
The U.S. government has reached an agreement with tech giants Nvidia and AMD, allowing them to sell specific advanced AI chips to China, reversing a previous ban. The deal, which involves a 15% revenue share for the U.S. government, comes as part of export licenses granted by the Trump administration.
The chips in question, Nvidia's H20 and AMD's MI308, are advanced AI processors critical for training complex AI systems. Due to their potential military and civilian uses, they are considered sensitive.
This deal reverses an April 2025 ban that had blocked exports of these chips to China, citing national security concerns. The revenue share means that Nvidia and AMD must give the U.S. government 15% of their income from selling these chips into the Chinese market.
The agreement was negotiated after Nvidia CEO Jensen Huang met with President Trump in early August 2025. President Trump confirmed the arrangement publicly on August 11, 2025, noting the negotiation and describing it as a way to both allow exports and retain government benefit.
Nvidia emphasized its compliance with U.S. export controls, stating it follows rules set by the government and hopes export rules will let American companies compete globally. Critics and observers see this deal as reflecting a shift by the U.S. government away from free market principles toward greater state involvement in strategic industries like semiconductors.
The U.S. government framed the agreement as a national security measure, turning these chip sales into a form of a "toll booth" for the government in transactions that power complex AI models with civilian and military applications.
Sources: 1. Reuters 2. Bloomberg 3. The Wall Street Journal 4. The Washington Post
Read also:
- VinFast's debut EV plant in India, Tata Harrier EV distribution starts, next-gen Mahindra Bolero sightings caught on camera
- Tesla-powered residences in Houston create a buyers' frenzy
- Ford accelerates electric vehicle production with a $2 billion restructuring of its Kentucky factory.
- Saudi Secures $83 Million Expansion Funding for its Multi-Platform Car Rental and Mobility Service
