NVIDIA and AMD agree to pay US government 15% of all revenue from AI chips sold to China

NVIDIA and AMD have both agreed to pay the US government 15% of all revenue generated from the sale of AI chips to China, according to a new report from Reuters.

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The new agreement follows the Trump administration's prevention of sales of NVIDIA's H20 chips to China in April, which was then followed up with an announcement last month that sales were going to proceed under a new agreement and that deliveries would begin soon.

Notably, on Friday the Commerce Department began issuing licenses for the sale of H20 chips to China, and when asked about the reentry into China an NVIDIA spokesperson told Reuters, "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide."

Adding, "We follow rules the US government sets for our participation in worldwide markets." China isn't a small market by any means for NVIDIA, with the company generating approximately $17 billion in revenue in China for the fiscal year ending January 26. That $17 billion figure represents 13% of total sales. As for AMD, financial reports for the company reveal it generated $6.2 billion in revenue in China, which accounts for 24% of total revenue.

The Financial Times reported that both AMD and NVIDIA agreed to the 15% levy on all AI chips being sold in China in order to obtain the export licenses for their products. The initial banning of AI chips being sold in China was under the pretense that these chips, being in the hands of China, posed a national security risk to the United States.

As for how the US government feels about the H20 now, according to a US official, the Trump administration doesn't feel the sale of H20 chips or any equivalent piece of hardware can compromise US national security.