Daijiworld Media Network – Washington
Washington, Aug 11: Nvidia and AMD have reportedly agreed to hand over 15% of revenue from sales of advanced AI chips to China as part of an arrangement with the US government, a senior American official told Reuters on Sunday.
The deal, first reported by the Financial Times, is said to cover Nvidia’s H20 chips and AMD’s MI308 semiconductors, both used in artificial intelligence applications. The US administration under President Donald Trump had halted sales of H20 chips to China in April, citing export control measures, but Nvidia announced last month that sales would be allowed to resume.
Another official confirmed on Friday that the Commerce Department had started issuing licenses for the exports. The 15% revenue-sharing arrangement is reportedly a condition for these licenses, though details on implementation remain unclear.
China remains a crucial market for both tech giants — Nvidia earned $17 billion in revenue from China in the fiscal year ending January 26, about 13% of its global sales, while AMD reported $6.2 billion from China in 2024, making up 24% of total revenue.
US Commerce Secretary Howard Lutnick recently defended the move, calling the H20 Nvidia’s “fourth-best chip” and arguing it was in America’s interest for Chinese firms to use US technology, even if the most advanced products remained banned.
Critics, however, have questioned the logic. “Either selling H20 chips to China is a national security risk, in which case we shouldn’t do it, or it’s not, in which case why impose this penalty?” said Geoff Gertz of the Center for New American Security.
Former Commerce Department adviser Alasdair Phillips-Robins accused the administration of “trading away national security protections for revenue.”
China’s foreign ministry has yet to comment on the development.