Nvidia and AMD sign 15% China sales agreement

Chipmakers Nvidia and AMD will hand 15 percent of revenues from China sales to the US government in exchange for export licenses.

Nvidia and AMD pay 15 percent of China chip sales to US

Nvidia will pay 15 percent of revenues from its H20 chip sales in China to the US government, and AMD will pay 15 percent of revenue from sales of its MI308 in China, under a licensing deal described by the White House and first reported by the Financial Times. The H20 chip was developed for the Chinese market after export controls were tightened in 2023. Sales of the chip were effectively banned by the Trump administration in April this year. Nvidia has pressed for a change in policy and has engaged with U.S. leaders to seek a path to resumed shipments, while Beijing has criticized export controls as unfair and warned against unilateral measures.

Beijing and Washington issued cautious responses to the agreement, with analysts noting the deal is unprecedented in its direct linkage of market access to revenue payments. A group of security specialists warned that chips optimized for AI could be used in military applications, highlighting broader concerns about how AI tech is governed in a geopolitically charged landscape.

The pact formalizes a new form of market access pricing, turning export permissions into a revenue tax of sorts for tech vendors. It signals that tech diplomacy now governs more than just licensing terms and raises the question of how sustainable such arrangements are for long term planning and investment. For investors, the arrangement adds another layer of risk in an already volatile market and may push companies to rethink margins and supply routes. For policymakers, it underscores the urgency of balancing national security with the need to keep global tech ecosystems moving.

Highlights

Policy choices here will shape the global tech map for years to come