U.S. Authorities Securing a Share of Revenue from AI Chip Sales by Nvidia and AMD to China
U.S. Government Strikes Revenue-Sharing Deal with Nvidia and AMD for AI Chip Sales to China
In a significant shift in the ongoing AI chip race, the U.S. government has reached a revenue-sharing agreement with Nvidia and AMD. This deal allows the two chipmakers to export specific high-end AI chips to Chinese customers under U.S. export licenses, despite existing restrictions on advanced technology exports to China.
Key details of the agreement include:
- Revenue-sharing arrangement: Nvidia and AMD have agreed to pay the U.S. Commerce Department 15% of their revenue from AI chip sales to China. Initially, the government sought a 20% cut from Nvidia, but the finalized rate was 15% following negotiations between Nvidia CEO Jensen Huang and President Trump.
- Chips involved: Nvidia’s H20 and AMD’s MI308 AI chips, designed to comply with U.S. export control policies, are the specific chips covered under the licenses.
- Government involvement: The U.S. government secured this cut as a form of control and revenue from sensitive exports amid U.S.-China technology tensions. Treasury Secretary Scott Bessent suggested the deal could serve as a model or “beta test” for other industries where the government might share in export revenues.
- Use of revenue: The funds collected are intended to help pay down the U.S. national debt, with potential future plans to share proceeds with American taxpayers if the program expands successfully.
- Public confirmation: President Trump confirmed the deal during an August 11, 2025, press conference, describing it as a negotiated solution that includes selling an "old chip" to China while the U.S. benefits from the revenue share.
This deal comes after the Biden administration repealed export controls, allowing for the current arrangement between Nvidia and the U.S. government. The repeal could potentially boost China's military AI programs, given the nature of advanced AI chips.
Under this arrangement, Nvidia is estimated to share up to $3 billion with the U.S. government this fiscal year alone. The agreement could potentially influence the Chinese military advancement, as well as the frontier AI capabilities in China.
The AI chip race has shifted in narrative, now involving the U.S. government, Nvidia, AMD, and China. This novel approach to trade controls and fiscal policy intertwined with national security concerns represents an unprecedented move by the U.S. government.
The revenue-sharing deal between Nvidia and AMD allows them to export specific AI chips to China, which are estimated to generate up to $3 billion for the U.S. government this fiscal year. This business transaction, following negotiations between Nvidia CEO Jensen Huang and President Trump, demonstrates the increasing role of artificial-intelligence technology in finance and the complex interplay between technology, business, and finance in international relations.
