Nvidia and AMD strike unusual deal: 15% of China chip sales to Uncle Sam

On August 11, 2025, Nvidia and AMD agreed to share 15% of their revenues from artificial intelligence chip sales to China with the U.S. government in exchange for export licenses. The White House confirmed the arrangement, and President Donald Trump publicly said he initially sought 20% before the figure landed at 15%. If you’re thinking “that’s not your usual tariff,” you’re right—it’s a revenue skim tied to specific products: Nvidia’s H20 and AMD’s MI308. ([cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html?utm_source=chatgpt.com), [washingtonpost.com](https://www.washingtonpost.com/politics/2025/08/11/nvidia-amd-15-revenue-share-deal/3c56c98c-76b8-11f0-a013-3892e10b2f53_story.html?utm_source=chatgpt.com))

This deal arrives after months of whiplash in chip policy. The administration halted sales of advanced chips to China in April; by July, officials indicated certain sales would resume under licensing, culminating in Monday’s confirmation. It’s a transactional way to reopen a lucrative market while claiming a win for U.S. coffers. For context, both H20 and MI308 are variants crafted to comply with earlier export curbs—then themselves got swept up in tighter rules—so this licensing-for-revenue swap is a fresh twist in a long policy saga. ([washingtonpost.com](https://www.washingtonpost.com/politics/2025/08/11/nvidia-amd-15-revenue-share-deal/3c56c98c-76b8-11f0-a013-3892e10b2f53_story.html?utm_source=chatgpt.com), [cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html?utm_source=chatgpt.com), [thetimes.co.uk](https://www.thetimes.co.uk/article/chipmakers-xj5tnzbpt?utm_source=chatgpt.com))

For Nvidia and AMD, the calculus is straightforward: 85% of something beats 100% of nothing. Analysts called the arrangement “unusual” but broadly positive because it restores access to the world’s second-largest AI market, even if it takes a government-sized bite out of each sale. Investors didn’t exactly throw confetti, but the mood was more “let’s get back to business” than “this sinks the ship.” Think of it as paying a toll to drive on the only highway to a massive customer base. ([cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html?utm_source=chatgpt.com), [wsj.com](https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-08-11-2025?utm_source=chatgpt.com))

Legally, though, the tollbooth is in uncharted territory. Trade lawyers and former officials warn that revenue-based fees for exports may clash with the Constitution’s prohibition on export taxes and with export-control laws that generally allow only administrative licensing fees. Expect scrutiny and, possibly, court challenges that test whether this is clever policy engineering or a bridge too far. Even some national-security veterans are uneasy, arguing export controls are meant to protect security, not generate revenue. ([barrons.com](https://www.barrons.com/articles/nvidia-h20-china-chips-illegal-9ef82914?utm_source=chatgpt.com), [washingtonpost.com](https://www.washingtonpost.com/technology/2025/08/10/nvidia-amd-china-chips-deal-trump/?utm_source=chatgpt.com))

Why does this resonate beyond the chip industry? Because it advances a broader theme we’ve seen across recent headlines: Washington is trying to fine-tune access to critical technology—sometimes tightening, sometimes loosening—while extracting concessions from companies to claim domestic wins. The H20 and MI308 were themselves designed to thread earlier rules; now they’re back with a meter running for the Treasury. It’s a reminder that in the AI era, policy risk can be as material as process nodes and transistor counts. ([thetimes.co.uk](https://www.thetimes.co.uk/article/chipmakers-xj5tnzbpt?utm_source=chatgpt.com))

What might it mean for everyday life? If you use AI-infused apps—translation, image tools, coding assistants—the chips that power those services don’t magically appear. Cloud providers and device makers tally hardware costs, licensing friction, and supply risk. A predictable (even if pricey) path to sell into China could improve global supply planning, which can stabilize prices and availability over time. On the other hand, the 15% haircut may nudge list prices up where margins are tight, or steer more sales to models and services that lean on non-restricted hardware. In short: your favorite AI tool probably won’t vanish, but its speed, cost, or feature rollout could shift around the edges.

A light comic note in a serious story: only in 2025 could a U.S. president describe a sought-after AI processor as “obsolete” while both the seller and the buyer race to get it. It’s like calling last season’s sneakers outdated as the line snakes around the block. In fast-moving tech, “old” can still be strategically vital—especially when “new” is barred from the shelf. ([washingtonpost.com](https://www.washingtonpost.com/politics/2025/08/11/nvidia-amd-15-revenue-share-deal/3c56c98c-76b8-11f0-a013-3892e10b2f53_story.html?utm_source=chatgpt.com), [siliconangle.com](https://siliconangle.com/2025/08/11/nvidia-amd-pay-us-government-15-revenue-ai-chip-exports-china/?utm_source=chatgpt.com))

Connections to other currents: the deal dovetails with a wider push to shape supply chains and standards for AI. The U.S. is trying to keep leading-edge capability at home while allowing some commerce to flow, betting that controlled engagement beats outright decoupling. Meanwhile, China will likely accelerate domestic alternatives to reduce reliance on imported AI chips. If that sprint succeeds, U.S. firms could face new rivals sooner; if it falters, this limited-access model could persist, normalizing “policy-priced” global tech trade. Monday’s move underscores how export controls have become a policy dial, not an on/off switch. ([wsj.com](https://www.wsj.com/livecoverage/stock-market-today-dow-sp-500-nasdaq-08-11-2025?utm_source=chatgpt.com))

Ideas to consider: - For investors, watch legal challenges—it’s hard to model a 15% line item if courts toss it. - For operators, scenario-plan for different fee levels or scope expansions; if it works for AI chips, could biotech tools or quantum hardware be next? - For consumers and developers, anticipate more region-specific products as companies design silicon “families” tailored to regulatory lanes.

Where could this lead? If the arrangement holds, government “revenue share for access” could become a template in other sensitive tech categories, encouraging companies to price policy into products the way they price in shipping or warranties. If it fails in courts or politics, we could revert to stricter bans, sharper supply shocks, and a faster race to self-sufficiency on both sides. Either way, Monday’s news signals a new phase in the tech-finance nexus: profits, policy, and geopolitics now share the same cap table—and they all want a bigger slice. ([barrons.com](https://www.barrons.com/articles/nvidia-h20-china-chips-illegal-9ef82914?utm_source=chatgpt.com))