Nvidia, AMD To Pay 15% Of China Chip Sale Revenues To U.S., Official Says
On August 10, Reuters reported that Nvidia and AMD have agreed to give 15% of revenue from sales of advanced computer chips like Nvidia’s H20 to the U.S. government, specifically for sales to China for artificial intelligence applications. This decision was confirmed by a U.S. official on Sunday.
The Trump administration had previously halted sales of H20 chips to China in April. However, Nvidia announced last month that the U.S. would allow them to resume sales and they were looking forward to starting deliveries soon.
The Commerce Department has started issuing licenses for the sale of H20 chips to China, as reported by another U.S. official on Friday.
A spokesperson for Nvidia stated that they follow the rules set by the U.S. government for participating in global markets. They expressed hope that export control rules would allow them to compete in China and worldwide.
AMD did not provide a comment on this news. The Financial Times had initially reported this development on Sunday. The U.S. Department of Commerce did not respond immediately to requests for comments.
The chipmakers agreed to share revenue with the U.S. as a condition for obtaining export licenses for their semiconductors, including AMD’s MI308 chips. The Trump administration has yet to decide how the money will be used.
Geoff Gertz, a senior fellow at the Center for New American Security, questioned the rationale behind this agreement, pointing out the contradictions in considering H20 chips a national security risk while also allowing their sale to China with an additional penalty.
Commerce Secretary Howard Lutnick mentioned that the resumption of AI chip sales was part of negotiations with China for rare earths. He described the H20 as Nvidia’s “fourth-best chip” in an interview with CNBC.
Lutnick emphasized the importance of Chinese companies using American technology, even if the most advanced chips were restricted from export. The U.S. official stated that the administration did not view the sale of H20 chips as a compromise to national security.
Alasdair Phillips-Robins, a former adviser at the Commerce Department during the Biden administration, criticized the decision, suggesting that trading national security protections for revenue was not advisable.
Reporting by Karen Freifeld; additional reporting by Yazhini MV and Gnaneshwar Rajan in Bengaluru; Editing by Caroline Humer and Jamie Freed
