Unprecedented Trade Policy: U.S. to Receive 15% Revenue from AI Chip Sales to China
President Donald Trump has implemented a groundbreaking trade policy, marking a significant shift in semiconductor trade relations. This policy mandates tech giants Nvidia and AMD to pay the U.S. government 15% of their revenue from AI chip sales to China in exchange for export licenses.
The arrangement, announced on August 11, 2025, enables Nvidia and AMD to recommence selling specific AI processors to Chinese companies after a prolonged period of restrictions. Initially, Trump demanded 20% of sales revenue but eventually settled for 15% after negotiations with Nvidia CEO Jensen Huang, as per the president’s own statements.
The deal specifically encompasses Nvidia’s H20 chips and AMD’s MI308 processors. Trump described these as “old” and “obsolete” technology that China already possesses. However, more advanced chips, such as Nvidia’s Blackwell series, remain under strict export controls. Trump has stated he would only consider sales with substantial performance downgrades of 30-50%.
The policy has been met with severe criticism from Senate Democrats, who sent a letter labeling it as “reckless” and imploring Trump to reverse his decision. In response, China has reportedly advised domestic companies to refrain from purchasing these U.S. chips and has initiated security reviews of their use.
This unparalleled “pay-to-play” approach to export licensing could potentially generate billions in revenue for the U.S. Treasury. However, it also sets a controversial precedent for international trade policy in sensitive technology sectors.
Source: CNBC