US will get a 15% cut of Nvidia and AMD chip sales to China under a new,
unusual agreement
[August 12, 2025]
NEW YORK (AP) — Nvidia and AMD have agreed to share 15% of their
revenues from chip sales to China with the U.S. government, as part of a
deal to secure export licenses for the semiconductors.
The Trump administration halted the sale of advanced computer chips to
China in April over national security concerns, but Nvidia and AMD
revealed in July that Washington would allow them to resume sales of the
H20 and MI308 chips, which are used in artificial intelligence
development.
President Trump confirmed the terms of the unusual arrangement in a
Monday press conference while noting that he originally wanted 20% of
the sales revenue when Nvidia asked to sell the "obsolete" H20 chip to
China. The president credited Nvidia CEO Jensen Huang for negotiating
him down to 15%.
"So we negotiated a little deal. So he’s selling a essentially old
chip," Trump said.
Nvidia did not comment about the specific details of the agreement or
its quid pro quo nature, but said they would adhere to the export rules
laid out by the administration.
"We follow rules the U.S. government sets for our participation in
worldwide markets. While we haven’t shipped H20 to China for months, we
hope export control rules will let America compete in China and
worldwide,” Nvidia wrote in a statement to the AP. “America cannot
repeat 5G and lose telecommunication leadership. America’s AI tech stack
can be the world’s standard if we race.”
AMD did not immediately reply to a request for comment.
Rep. John Moolenaar, the Republican chair of the House Select Committee
on China, expressed concern over the deal.
“There are questions about the legal basis for doing so,” he said.
“Export controls are a frontline defense in protecting our national
security, and we should not set a precedent that incentivizes the
government to grant licenses to sell China technology that will enhance
its AI capabilities.”
The top Democrat on the panel also raised concerns over the reported
agreement, calling it “a dangerous misuse of export controls that
undermines our national security.”
Rep. Raja Krishnamoorthi, the ranking member of the House Select
Committee on China, said he would seek answers about the legal basis for
this arrangement and demand full transparency from the administration.
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 “Our export control regime must be
based on genuine security considerations, not creative taxation
schemes disguised as national security policy,” he said. “Chip
export controls aren’t bargaining chips, and they’re not casino
chips either. We shouldn’t be gambling with our national security to
raise revenue.”
Derek Scissors, senior fellow and China expert at the conservative
American Enterprise Institute, reiterated Moolenaar's point about
the constitutionality of the deal.
“There’s no precedent for this, probably because
export taxes are unconstitutional, ” said Derek Scissors, senior
fellow and China expert at the conservative American Enterprise
Institute. “They call it a fee, but 15% of sales revenue is about a
standard a tax as it comes. For this reason, I don’t think the
‘arrangement’ is at all durable. ‘’
"If it were to last, it has two possible implications. First,
there's a possible export tax that high-profile companies and goods
must consider. Or the tax only applies in exceptional situations,
such as changing export controls. Then we’d risk national security
for the sake of tax revenue, which is effectively the same as
cutting the defense budget," Scissors said.
Back in July, Nvidia argued that tight export controls around their
chip sales would cost the company an extra $5.5 billion. They’ve
argued that such limits hinder U.S. competition in a sector in one
of the world’s largest markets for technology, and have also warned
that U.S. export controls could end up pushing other countries
toward China’s AI technology.
Commerce Secretary Howard Lutnick told CNBC in July that the renewed
sale of Nvidia’s chips in China was linked to a trade agreement made
between the two countries on rare earth magnets.
Restrictions on sales of advanced chips to China have been central
to the AI race between the world’s two largest economic powers, but
such controls are also controversial. Proponents argue that these
restrictions are necessary to slow China down enough to allow U.S.
companies to keep their lead. Meanwhile, opponents say the export
controls have loopholes — and could still spur innovation. The
emergence of China’s DeepSeek AI chatbot in January particularly
renewed concerns over how China might use advanced chips to help
develop its own AI capabilities.
—-
Associated Press writers Josh Boak, Shawn Chen, Didi Tang and Paul
Wiseman contributed to the reporting.
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