Nvidia and AMD to pay 15% of China chip sales to US

August 11, 2025

The US government has reached an unprecedented agreement with chip giants Nvidia and AMD requiring them to pay 15% of their Chinese revenues to secure export licenses for selling specific chips to China. This arrangement follows previous US export restrictions on powerful chips used in artificial intelligence due to national security concerns. Nvidia's H20 chip, developed specifically for the Chinese market after 2023 restrictions, was effectively banned in April 2024 by the Trump administration but may now resume sales under this revenue-sharing arrangement.

Who is affected

Chinese technology companies and buyers of Nvidia's H20 and AMD's MI308 chips
Nvidia and AMD as semiconductor manufacturers
The US government receiving 15% of chip sales revenue
China's AI and technology development capabilities
Potentially the Chinese military (as suggested by security experts)

What action is being taken

Nvidia and AMD are agreeing to pay 15% of Chinese revenues to the US government
The US government is creating a revenue-sharing arrangement to permit chip sales to China
Beijing is relaxing controls on rare earth exports amid easing trade tensions
The US is lifting restrictions on chip design software firms operating in China
Nvidia's CEO Jensen Huang is actively lobbying both sides for chip sales resumption

Why it matters

The arrangement represents an "unprecedented" approach to balancing trade and national security concerns
It creates substantial financial pressure and strategic uncertainty for technology vendors
The deal signals a potential easing of US-China trade tensions after previous restrictions
Security experts warn these chips could enable Chinese military advancements in autonomous weapons and battlefield decision-making
The agreement could affect America's competitive position in global AI technology leadership

What's next

No explicit next steps stated in the article

Read full article from source: BBC