After months of lost sales, the US gives Nvidia and AMD the green light to
sell AI chips to China… in exchange for a healthy cut of the revenue.
From “You’re Banned” to “We’ll Take a Cut”For months, Nvidia and AMD watched one of the world’s biggest artificial intelligence (AI ) markets slip through their fingers. The US government’s ban on selling certain
high-performance chips to China didn’t just sting — it torched billions in
potential revenue. Nvidia’s H20 and AMD’s MI308, chips designed specifically to
thread the needle of Biden-era export rules, were dead in the water after an
April prohibition from the Trump administration.
Nvidia and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licenses, the Financial Times reported Sunday https://t.co/5Mfdjm5OHr
— Bloomberg (@business) August 10, 2025Nvidia had reason to sweat. Bernstein analysts reckoned that before the
controls, Nvidia
could have shifted around 1.5 million H20 chips to China in 2025, worth roughly
$23 billion. AMD, while a smaller player in the AI chip feeding frenzy, was
facing a similarly bruising loss of access to the world’s second-largest
economy.
But in Washington, nothing is permanent except political convenience —
and perhaps tariffs.
The 15% Cover ChargeLast week, the Bureau of Industry and Security began issuing the
long-awaited export licenses. The catch? Nvidia and AMD must hand
over 15% of their China chip revenues directly to the US government. For
Nvidia, that’s 15% of H20 sales. For AMD, 15% of MI308 sales. Both companies
have confirmed the arrangement in broad strokes, though AMD has kept its public
comments to a minimum.
Yes, you read that right, 15% of the revenue.
A US official described the deal as “unprecedented” — no American
company has ever been asked to part with a slice of its revenues in exchange
for an export license. A 15% levy doesn’t exactly erase any national security
risks, raising the awkward question: if the chips were such a threat in April,
why is selling them now okay as long as Washington gets paid?
Deborah Elms of the Hinrich Foundation (LinkedIn).
“You either have a national security problem or you don’t,” Deborah
Elms of the Hinrich Foundation told the BBC. “If you have a 15% payment, it
doesn’t somehow eliminate the national security issue.”
How We Got HereThe H20 was born out of compromise. When the Biden administration
slapped strict AI chip export controls on China in 2023, Nvidia engineered a
version that sat just under the limits, allowing it to keep a foot in the
market. Trump’s April ban on the chip closed that loophole — until CEO
Jensen Huang personally lobbied the president.
Most people don’t realize how massive this announcement truly is.
This covers 15% of REVENUE from China, not PROFIT, for both Nvidia and AMD.
It also means the Trump Administration is now negotiating company-by-company “trade deals.”
The trade war just entered a new era. https://t.co/cHn6tiCkq0
— The Kobeissi Letter (@KobeissiLetter) August 10, 2025Within days of their White House meeting, licenses began flowing.
Officially, the reversal comes as part of broader US-China trade talks, which
have included Beijing loosening rare earth export controls and Washington
easing restrictions on chip design software firms. Both
sides appear to be having a breather, with no clear outcome at this point. Unofficially,
it fits a pattern: Trump’s administration has a habit of striking deals where
companies pay, build, or invest their way back into favor. The Art of the Deal,
anyone?
Beijing’s Not Exactly CheeringWhile Wall Street is likely to welcome the return of Chinese sales, the
chips themselves are under new scrutiny from the buyer’s side. Chinese
regulators have hauled Nvidia
in for questioning about alleged “backdoor” vulnerabilities, including
claims the hardware could enable remote shutdowns. Of course, Nvidia
denies this.
For now, there’s no sign Beijing will block the imports outright —
especially given its own need for cutting-edge AI hardware — but the political
and security baggage isn’t going away.
A Price Worth Paying?From Nvidia’s perspective, 15% is steep but survivable, especially when
the alternative is zero China sales. The company’s statement to the BBC was
pragmatic: “We follow rules the US government sets for our participation in
worldwide markets […] America cannot repeat 5G and lose telecommunication
leadership.” Translation: it’s better to pay the toll, but the US needs to be
careful.
BREAKING: Trump’s plan to take a 15% cut of Nvidia and AMD chip sales to China isn’t a tariff, it’s a shakedown. The government is inserting itself as a middleman in international trade, hitting businesses and consumers with what could be the biggest tax hike in U.S. history. pic.twitter.com/JIxQqYCH60
— James Blunt (@JBlunt1018) August 11, 2025For AMD, the deal could mean a valuable foothold in a market where it
trails Nvidia badly in AI hardware. But the precedent is startling — not just
for chipmakers, but for any US tech firm caught in the geopolitical crossfire.
Charlie Dai, VP, Principal Analyst at Forrester Research (LinkedIn).
Charlie Dai of tech and business research firm, Forrester, summed it
up: “The arrangement underscores the high cost of market access amid escalating
tech trade tensions, creating substantial financial pressure and strategic
uncertainty for tech vendors.”
The Bigger GameThe 15% deal is a microcosm of the current US-China relationship: an
uneasy mix of rivalry, mutual dependence, and transactional fixes. As of now,
both sides are still negotiating over tariffs and tech access, with a 90-day
truce in place but no long-term agreement in sight.
Liza Tobin, foreign policy expert, (LinkedIn).
If this experiment works, Washington may have found itself a new policy
lever: turning export controls into revenue streams. But as former National
Security Council China expert Liza Tobin quipped, “What’s next — letting Lockheed
Martin sell F-35s to China for a 15 per cent commission?”
For Nvidia and AMD, the calculation is simple. They’ve been let back
into one of the most lucrative markets on the planet. The price is high, the
politics are messy, but the alternative was watching competitors fill the gap.
In the end, sometimes you pay the toll and keep driving.
For more stories from the tech and finance worlds, follow our dedicated
Trending section.
After months of lost sales, the US gives Nvidia and AMD the green light to
sell AI chips to China… in exchange for a healthy cut of the revenue.
From “You’re Banned” to “We’ll Take a Cut”For months, Nvidia and AMD watched one of the world’s biggest artificial intelligence (AI ) markets slip through their fingers. The US government’s ban on selling certain
high-performance chips to China didn’t just sting — it torched billions in
potential revenue. Nvidia’s H20 and AMD’s MI308, chips designed specifically to
thread the needle of Biden-era export rules, were dead in the water after an
April prohibition from the Trump administration.
Nvidia and Advanced Micro Devices Inc. agreed to pay 15% of their revenues from chip sales to China to the US government as part of a deal with the Trump administration to secure export licenses, the Financial Times reported Sunday https://t.co/5Mfdjm5OHr
— Bloomberg (@business) August 10, 2025Nvidia had reason to sweat. Bernstein analysts reckoned that before the
controls, Nvidia
could have shifted around 1.5 million H20 chips to China in 2025, worth roughly
$23 billion. AMD, while a smaller player in the AI chip feeding frenzy, was
facing a similarly bruising loss of access to the world’s second-largest
economy.
But in Washington, nothing is permanent except political convenience —
and perhaps tariffs.
The 15% Cover ChargeLast week, the Bureau of Industry and Security began issuing the
long-awaited export licenses. The catch? Nvidia and AMD must hand
over 15% of their China chip revenues directly to the US government. For
Nvidia, that’s 15% of H20 sales. For AMD, 15% of MI308 sales. Both companies
have confirmed the arrangement in broad strokes, though AMD has kept its public
comments to a minimum.
Yes, you read that right, 15% of the revenue.
A US official described the deal as “unprecedented” — no American
company has ever been asked to part with a slice of its revenues in exchange
for an export license. A 15% levy doesn’t exactly erase any national security
risks, raising the awkward question: if the chips were such a threat in April,
why is selling them now okay as long as Washington gets paid?
Deborah Elms of the Hinrich Foundation (LinkedIn).
“You either have a national security problem or you don’t,” Deborah
Elms of the Hinrich Foundation told the BBC. “If you have a 15% payment, it
doesn’t somehow eliminate the national security issue.”
How We Got HereThe H20 was born out of compromise. When the Biden administration
slapped strict AI chip export controls on China in 2023, Nvidia engineered a
version that sat just under the limits, allowing it to keep a foot in the
market. Trump’s April ban on the chip closed that loophole — until CEO
Jensen Huang personally lobbied the president.
Most people don’t realize how massive this announcement truly is.
This covers 15% of REVENUE from China, not PROFIT, for both Nvidia and AMD.
It also means the Trump Administration is now negotiating company-by-company “trade deals.”
The trade war just entered a new era. https://t.co/cHn6tiCkq0
— The Kobeissi Letter (@KobeissiLetter) August 10, 2025Within days of their White House meeting, licenses began flowing.
Officially, the reversal comes as part of broader US-China trade talks, which
have included Beijing loosening rare earth export controls and Washington
easing restrictions on chip design software firms. Both
sides appear to be having a breather, with no clear outcome at this point. Unofficially,
it fits a pattern: Trump’s administration has a habit of striking deals where
companies pay, build, or invest their way back into favor. The Art of the Deal,
anyone?
Beijing’s Not Exactly CheeringWhile Wall Street is likely to welcome the return of Chinese sales, the
chips themselves are under new scrutiny from the buyer’s side. Chinese
regulators have hauled Nvidia
in for questioning about alleged “backdoor” vulnerabilities, including
claims the hardware could enable remote shutdowns. Of course, Nvidia
denies this.
For now, there’s no sign Beijing will block the imports outright —
especially given its own need for cutting-edge AI hardware — but the political
and security baggage isn’t going away.
A Price Worth Paying?From Nvidia’s perspective, 15% is steep but survivable, especially when
the alternative is zero China sales. The company’s statement to the BBC was
pragmatic: “We follow rules the US government sets for our participation in
worldwide markets […] America cannot repeat 5G and lose telecommunication
leadership.” Translation: it’s better to pay the toll, but the US needs to be
careful.
BREAKING: Trump’s plan to take a 15% cut of Nvidia and AMD chip sales to China isn’t a tariff, it’s a shakedown. The government is inserting itself as a middleman in international trade, hitting businesses and consumers with what could be the biggest tax hike in U.S. history. pic.twitter.com/JIxQqYCH60
— James Blunt (@JBlunt1018) August 11, 2025For AMD, the deal could mean a valuable foothold in a market where it
trails Nvidia badly in AI hardware. But the precedent is startling — not just
for chipmakers, but for any US tech firm caught in the geopolitical crossfire.
Charlie Dai, VP, Principal Analyst at Forrester Research (LinkedIn).
Charlie Dai of tech and business research firm, Forrester, summed it
up: “The arrangement underscores the high cost of market access amid escalating
tech trade tensions, creating substantial financial pressure and strategic
uncertainty for tech vendors.”
The Bigger GameThe 15% deal is a microcosm of the current US-China relationship: an
uneasy mix of rivalry, mutual dependence, and transactional fixes. As of now,
both sides are still negotiating over tariffs and tech access, with a 90-day
truce in place but no long-term agreement in sight.
Liza Tobin, foreign policy expert, (LinkedIn).
If this experiment works, Washington may have found itself a new policy
lever: turning export controls into revenue streams. But as former National
Security Council China expert Liza Tobin quipped, “What’s next — letting Lockheed
Martin sell F-35s to China for a 15 per cent commission?”
For Nvidia and AMD, the calculation is simple. They’ve been let back
into one of the most lucrative markets on the planet. The price is high, the
politics are messy, but the alternative was watching competitors fill the gap.
In the end, sometimes you pay the toll and keep driving.
For more stories from the tech and finance worlds, follow our dedicated
Trending section.