Nvidia and AMD Reach Agreement to Pay 15% of China Chip Revenues to US
Nvidia and AMD have struck a deal with the US government, committing to pay 15% of their semiconductor revenues from China amid easing trade tensions.
In a significant development for the semiconductor industry, chip giants Nvidia and AMD have consented to remit 15% of their sales from chip exports to China back to the US government. According to sources familiar with the matter, this agreement aims to facilitate the companies’ acquisition of export licenses to operate in one of the world's largest markets. Nvidia's chief executive, Jensen Huang, acknowledged the shifts in US export controls and expressed hope on future sales opportunities, having previously met with President Trump to advocate for a reinstatement of chip sales to China. Despite prior bans on specific product lines, recent diplomatic maneuvers have led to a relaxation of trade restrictions, including the easing of Chinese controls on rare earth exports. As Washington and Beijing continue to navigate their complex trade relationship, the semiconductor sector is closely observed as a bellwether for broader economic cooperation.
Nvidia's agreement to pay a portion of revenues from its H20 chips, specifically developed for the Chinese market, marks a notable shift in its strategy after facing severe restrictions since early 2023. Meanwhile, AMD will also contribute a similar percentage from its MI308 chips. This arrangement comes on the heels of a temporary truce in the trade war, underscoring a potential thaw in relations between the two economic powerhouses.
While AMD has yet to comment on the agreement, analysts are watching how these changes might impact the broader technology sector amid ongoing negotiations around tariffs and regulatory compliance between the US and China.
