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Nvidia, AMD to Give U.S. 15% Cut on AI Chip Sales to China

Unusual arrangement follows Nvidia CEO Jensen Huang’s meeting with Trump

Nvidia NVDA 1.07%increase; green up pointing triangle and Advanced Micro Devices AMD 0.21%increase; green up pointing triangle have agreed to give the Trump administration a portion of the sales from their artificial-intelligence chips to China, unusual agreements that deepen their relationships with the U.S. government.

The Trump administration will receive 15% of the sales as part of a deal to approve exports of Nvidia’s H20 AI chip to China, according to people familiar with the matter. That could amount to billions of dollars given demand for the H20 chips and is the latest example of the White House employing novel tactics to raise revenue.

The administration has reached the same agreement with AMD for its MI308 chip, the people said. Details of the arrangements and the financial structures are still being worked out.

The Commerce Department began issuing licenses for Nvidia to send its H20 chip to China Friday, following through on a July promise. Over the weekend, the agency started moving licenses for the AMD chip, some of the people familiar with the matter said.

Exports of the H20 and MI308 were halted in April, when trade tensions between the U.S. and China were simmering. Nvidia CEO Jensen Huang has gone on a charm offensive since then, talking to officials in both countries about the need to do business with one another.

“We follow rules the U.S. government sets for our participation in worldwide markets,” Nvidia said in a statement Sunday. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”

The revenue agreement came after Huang met with President Trump on Wednesday, the same day Trump announced tech companies that invest in the U.S. would be exempt from new chip tariffs. The Financial Times earlier reported on the agreements.

It is unusual for companies to essentially pay for export licenses. The agreements follow criticism from national-security hawks who fear the chips and other technology will boost China’s AI ecosystem and military.

Nvidia has said its chips don’t get diverted to U.S. adversaries in large quantities. Administration officials say the H20 isn’t a top-performing chip and that they want Nvidia to compete with China’s Huawei around the world.

The Nvidia and AMD licenses are some of the only licenses being granted while the U.S. and China continue negotiating on trade. Access to semiconductors is one of the biggest priorities for the Chinese and advantages for the U.S.

Nvidia developed the H20 specifically for the Chinese market in 2023 after the Biden administration placed export restrictions on more advanced AI chips. The chip uses the company’s Hopper architecture, which allows for tens of thousands of cores, or processing units that can each handle simultaneous computations, and is less powerful than Nvidia’s latest series, known as Blackwell.

The chip isn’t advanced enough to quickly train large language AI models, but is useful for inference functions, or the processes by which models that have already been trained can draw conclusions from new data.

Chinese authorities have raised concerns about H20 chips, cautioning that they aren’t environmentally friendly and could come with security risks. Nvidia said this month that the chips don’t have so-called “backdoors” that allow them to be controlled or accessed remotely.

The Trump administration has made exporting U.S. AI to the rest of the world a top priority, hoping that American chip and model companies become the standard globally.

Chinese models from companies such as DeepSeek and Alibaba are taking hold in many countries, increasing pressure on the U.S. to continue improving its capabilities in that area.