NVIDIA & AMD Secure Unique 15% Revenue Deal with China
In a remarkable trade agreement, chip manufacturers NVIDIA and AMD have consented to remit 15% of their AI chip sales revenues from China to the U.S. government. This is in exchange for export licenses. The Trump administration confirmed the deal, which includes NVIDIA’s H20 chip and AMD’s MI308 processor – both crucial for AI applications.
President Trump disclosed that he initially demanded a 20% cut but agreed to 15% after a meeting with NVIDIA CEO Jensen Huang. This arrangement permits both companies to recommence sales to the vast Chinese market, following previous export restrictions.
However, Chinese state media has expressed security concerns regarding potential ‘backdoors’ in the chips. Despite the revenue sharing, analysts perceive the deal as a positive move for both companies. They argue that retaining 85% of Chinese sales is preferable to having no market access at all.
Yet, the precedent of tying export licenses to government revenue sharing has sparked constitutional debates among trade experts. Some have labeled it an unprecedented ‘shakedown’ of private companies.
Read more about the deal and its implications here.