American tech giants Nvidia and AMD have agreed to transfer 15% of their revenue from the sale of AI chips in China to the United States government. There is a crucial condition both companies must comply with to obtain the necessary export license that will allow them to continue selling products in the Chinese market. The agreement is causing a major stir and is highly controversial in financial markets.
The matter concerns Nvidia’s H20 chips and AMD’s MI308 — less advanced versions of AI processors designed to meet current export restrictions. After a previous export ban, the companies can now return to the lucrative Chinese market but must hand over a lion’s share of the revenue to the U.S. Treasury.
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Create account Try a demo Download mobile app Download mobile appNews of the agreement was not received enthusiastically by investors, with Nvidia and AMD shares declining. Concerns arise both over the financial impact of the deal and its effect on trade relations between the U.S. and China. Nvidia admitted that in the last quarter it generated $4.6 billion in revenue from H20 chips and was unable to sell chips worth an additional $2.5 billion due to restrictions. If sales return to previous levels, the 15% share paid to the government could bring the U.S. budget as much as $1 billion quarterly.
Chinese state media sharply criticized the H20 chips, calling them inefficient and potentially dangerous. Accusations regarding possible use of the chips for espionage or sabotage aim to discourage domestic companies from purchasing them. Nevertheless, since China still cannot independently produce enough advanced AI processors, the H20 chips may still find widespread use in the local industry.
The Trump administration increasingly applies a transactional approach, conditioning access to the American market on political and financial concessions. Similar mechanisms have already been introduced in the sale of US Steel to Japan and negotiations with Apple. Some analysts warn, however, that such policies may destabilize the international trade system and encourage the creation of similar “taxes” in the future.
The suspension of the trade dispute between the U.S. and China expires on August 12. Although it seems likely the truce will be extended, negotiations are ongoing and the situation remains dynamic. Failure of talks could lead to new tariffs and restrictions, once again threatening the profits of tech giants. Experts emphasize that the agreement with Nvidia and AMD could mark the beginning of a new era where states use private companies as instruments of foreign policy.
