How Much Will NVIDIA AMD Chip Sales Be Cut by the US?

NVIDIA and AMD have entered into an unprecedented agreement with the US government. 

Under the deal, both companies will hand over 15% of their revenue from certain chip sales in China in exchange for export licenses. This move marks a rare instance where Washington directly benefits financially from sales previously restricted under national security measures.

Nvidia Will Pay The 15% Revenue Transfer

From the sale of its H20 chip in China, while AMD will do the same for sales of its MI308 chip. Both chips are considered advanced processors, particularly suitable for artificial intelligence (AI) workloads. 

These products have been at the center of geopolitical disputes because of their potential applications in both civilian and military AI systems.

The US had earlier banned the sale of high-performance AI chips to China under export control rules, citing national security risks. These controls are generally applied to prevent sensitive technology from enhancing a rival nation's military capabilities. 

However, in this new arrangement, the companies can continue sales, if they agree to the revenue-sharing condition.

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National Security Debate About The High Performance Chip Trade

Critics in the US are raising serious questions about the decision. Some policy experts point out that if a product truly poses a national security threat, allowing its sale in exchange for a payment could undermine the purpose of export restrictions altogether. 

Deborah Elms, head of trade policy at the Hinrich Foundation, expressed the view that this approach does not resolve the core issue of security.

On social media, reactions ranged from calling the arrangement a "shakedown" to labeling it an illegal export tax. Under the US Constitution, export taxes are forbidden, which makes the legality of this policy an open question. 

Peter Harrell, a fellow at the Carnegie Endowment for International Peace, highlighted the dangerous precedent of monetizing national security decisions.

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Beijing’s Response and Market Pressure

China has criticized US export control measures in the past, accusing Washington of engaging in "unilateral bullying" that disrupts free trade. From Beijing's perspective, these restrictions are politically motivated rather than purely about security.

For tech companies like NVIDIA and AMD, the new rules represent a difficult balancing act. On one hand, China is a major market for high-performance chips, especially in AI development. 

On the other, the US government’s export rules are tightening, and compliance is essential to maintain access to global markets.

Charlie Dai, vice president and principal analyst at Forrester, described the deal as "unprecedented" and a clear example of how escalating trade tensions are increasing operational costs for global tech firms.

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The Chips in Question: H20 and MI308

NVIDIA's H20 chip was specifically developed for the Chinese market after earlier US restrictions were announced in 2023. 

The design attempted to meet US export control rules while still appealing to China’s growing AI sector. However, the Trump administration effectively banned its sale in April this year.

AMD’s MI308 chip is part of its advanced data center and AI accelerator lineup. These chips are used in complex machine learning tasks, making them valuable to a range of industries, but also potentially useful for military AI applications.

Security experts have warned that such chips could enable more than just industrial automation. 

In a letter to US Commerce Secretary Howard Lutnick, a group of specialists cautioned that they might also be used in autonomous weapons systems, surveillance, and rapid military decision-making.

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Nvidia and Intel: Lobbying and Negotiations Between Us & China

NVIDIA CEO Jensen Huang has reportedly been lobbying both US and Chinese officials for months in an effort to resume sales in China. According to reports, Huang met with US President Donald Trump last week to discuss the matter.

Meanwhile, Intel, another major player in the chip industry, has also been drawn into the political spotlight. Intel’s CEO, Lip-Bu Tan, recently met with Trump to discuss US tech manufacturing leadership. 

Trump had previously called for Tan’s resignation over alleged links to Chinese military-affiliated companies—an accusation Tan has denied.

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Pay-to-Export Broader Implications for the Tech Industry

This agreement may set a precedent for how the US manages technology exports to strategic competitors. It signals a shift from outright bans toward conditional sales with financial concessions to the government. 

However, this approach raises important policy questions: does it protect national security, or does it create a new form of taxation on tech companies?

The global chip market is already under pressure from supply chain challenges, rising production costs, and fierce competition for AI hardware dominance. 

If more countries adopt similar “pay-to-export” policies, it could fragment the semiconductor trade and slow down technological innovation.

Conclusion

The 15% revenue deal between NVIDIA, AMD, and the US government underscores the complex interplay between national security, international trade, and corporate strategy. 

While it allows these companies to maintain a presence in the Chinese market, it also highlights the growing financial and political costs of operating in a world where technology and geopolitics are increasingly intertwined.

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FAQ

What is the new US policy affecting NVIDIA and AMD?

The US now requires NVIDIA and AMD to pay 15% of revenue from certain chip sales to China in exchange for export licenses.

Why are these chips considered sensitive?

The H20 and MI308 chips are advanced AI processors that could be used for both civilian applications and military purposes.

Is the 15% payment legal under US law?

Critics argue it may violate the US Constitution’s ban on export taxes, though the government has framed it as a licensing condition.

How might this affect the global semiconductor market?

Such policies could increase costs, create trade barriers, and potentially slow down innovation in the AI and semiconductor industries.