Nvidia and AMD’s 15% China Chip Deal: A New Kind of Export Control

On August 11, 2025, the U.S. government confirmed a highly unusual arrangement: Nvidia and AMD can resume selling certain AI chips into China if they hand over 15% of the revenue from those sales to the U.S. Treasury. In practice, the deal ties export licenses for Nvidia’s H20 and AMD’s MI308 chips to a revenue-sharing “cover charge,” a first-of-its-kind twist in the long-running tech standoff between Washington and Beijing. ([pbs.org](https://www.pbs.org/newshour/politics/under-new-unusual-agreement-u-s-will-get-a-15-cut-of-nvidia-and-amd-chip-sales-to-china))

What actually happened

After months of tightening controls, Washington is now allowing sales of scaled‑down AI chips to Chinese customers—so long as the companies pay the 15% fee. President Trump publicly confirmed the arrangement and even joked that he initially pushed for 20%, with Nvidia’s CEO negotiating him down. Nvidia and AMD, for their part, said they will follow U.S. rules. Think of it as an export control that comes with a toll booth. ([washingtonpost.com](https://www.washingtonpost.com/technology/2025/08/10/nvidia-amd-china-chips-deal-trump/))

At a technical level, the licenses cover limited‑performance parts (including Nvidia’s H20) rather than the bleeding‑edge versions restricted on national‑security grounds. U.S. officials signaled that this revenue-share mechanism is how some sales will move forward from here. In other words: downgraded chips, upgraded paperwork. ([reuters.com](https://www.reuters.com/world/china/trump-opens-door-sales-version-nvidias-next-gen-ai-chips-china-2025-08-11/))

Why it matters

This isn’t just administrative fine print; it’s a policy experiment. Legal and policy experts quickly flagged constitutional questions, noting that the U.S. traditionally avoids anything that looks like an export tax. Others warned that “selling” exceptions to security rules muddies the purpose of export controls. Whether you view it as pragmatic statecraft or a perilous precedent, one thing is clear: it could redefine how governments monetize (and manage) access to strategic technology. ([washingtonpost.com](https://www.washingtonpost.com/technology/2025/08/10/nvidia-amd-china-chips-deal-trump/), [reuters.com](https://www.reuters.com/commentary/breakingviews/chip-export-taxes-flunk-fiscal-security-tests-2025-08-11/))

Market and business impact

For investors, the calculus is simple: 85% of revenue beats 0%. Analysts told CNBC the deal is likely a near‑term positive for Nvidia and AMD because it restores access to the world’s No. 2 market, even if margins take a trim. The bigger unknowns are whether chipmakers quietly pass the 15% through to prices, and how long the goalposts stay in place. Shares were choppy on the day—a reminder that policy risk is now a core variable in semiconductor valuations. ([cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html))

How this connects to recent moves

If this feels like whiplash, that’s because it is. The administration halted advanced chip sales to China in April, then in July signaled that limited exports might resume; now we have the revenue‑share licenses. The zig‑zag underscores a broader theme: Washington wants to restrain China’s access to frontier AI horsepower without fully ceding a massive commercial market to domestic rivals. It’s also a response to political pressure to “get tough” while avoiding a blanket decoupling that would be costly for U.S. firms. ([pbs.org](https://www.pbs.org/newshour/politics/under-new-unusual-agreement-u-s-will-get-a-15-cut-of-nvidia-and-amd-chip-sales-to-china))

The comic relief (with a serious point)

Imagine AI chips trying to enter a nightclub called “Global Trade.” The bouncer—let’s call him Uncle Sam—checks IDs, measures clock speeds, and says, “You can come in, but there’s a 15% cover.” It’s a funny visual, but the subtext is real: the U.S. is turning export controls into a metered gateway rather than a hard wall, effectively taxing access to its most valuable tech. That may be clever in the short run, but it’s also an invitation for copycats—and legal challenges.

Fresh perspectives: what to watch next

• Pricing and pass‑through: Do Nvidia and AMD eat the 15% or adjust list prices in China? If prices rise, Chinese buyers have more incentive to accelerate alternatives from Huawei and others. ([cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html))
• Regulatory creep: Today it’s AI chips; tomorrow it could be other sensitive tech. A revenue-share template might tempt policymakers elsewhere, complicating global compliance for multinationals. ([reuters.com](https://www.reuters.com/commentary/breakingviews/chip-export-taxes-flunk-fiscal-security-tests-2025-08-11/))
• Tech trajectory: Even “downgraded” chips can train capable models. Expect China to buy time with imports while racing to close the gap domestically—meaning competition may intensify, not ease. ([reuters.com](https://www.reuters.com/world/china/trump-opens-door-sales-version-nvidias-next-gen-ai-chips-china-2025-08-11/))

How it may affect everyday life

For consumers, the near‑term effect is subtle: AI features in apps, phones, and services won’t suddenly vanish in China, and U.S. chip progress keeps funding R&D. But the longer the rules wobble, the more companies will duplicate supply chains and redesign products for regulatory zones. That tends to mean higher costs, slower rollouts, and more regionalized technology—outcomes you might feel in prices or delayed features, whether you’re in Shanghai, Stuttgart, or Seattle. ([cnbc.com](https://www.cnbc.com/2025/08/11/trump-nvidia-amd-china-chip-revenue-deal-implications.html), [reuters.com](https://www.reuters.com/commentary/breakingviews/chip-export-taxes-flunk-fiscal-security-tests-2025-08-11/))

The road ahead

Two scenarios loom. In the optimistic one, the “15% cover” buys stability: companies plan better, governments claim a win, and innovation continues—albeit with guardrails. In the cautious one, legal challenges, tit‑for‑tat policies, or price hikes trigger another round of fragmentation. Either way, this deal is a bellwether. It suggests the future of tech policy isn’t just about what you can sell, but what you must surrender to sell it. Keep an eye on the fine print—and the bouncer at the door. ([washingtonpost.com](https://www.washingtonpost.com/technology/2025/08/10/nvidia-amd-china-chips-deal-trump/))