Nvidia, AMD to share 15% of China AI chip sales with US under Trump deal

Shortly after Nvidia CEO met Trump and agreed to a 15% cut, the US Commerce Department began issuing licences for AI chip sales to China

Chipmakers Nvidia and Advanced Micro Devices (AMD) will share 15 per cent of revenue from AI chip sales to China with the US government, The New York Times reported on Monday (IST). The agreement follows a meeting between Nvidia chief executive officer Jensen Huang and US President Donald Trump at the White House last week.

 

According to the report, shortly after the meeting, the US Commerce Department began rolling out licences for AI chip sales to China. The Trump administration had approved sales of Nvidia’s H20 chips to China last month, but the licences were issued only last week.

 

Deal expected to generate $2 billion for US

While Huang has led negotiations, AMD is also selling AI chips to China. Nvidia’s H20 chips and AMD’s MI308 chips are both covered under the deal. 

 

The arrangement could generate close to $2 billion for the US government. Nvidia is projected to sell over $15 billion worth of H20 chips by the end of the year, while AMD’s China sales could reach $800 million.

Not entirely without precedent

Although unusual, the deal is not unprecedented. The Trump administration has previously intervened in the business dealings of US companies, including the June approval of Nippon Steel’s investment in US Steel, which involved a “golden share” arrangement.

 

Trump has also used tariffs to push manufacturing to the US. Huang’s meeting with Trump came just ahead of the administration’s announcement of 100 per cent tariffs on foreign-made semiconductors.

Shift in US policy towards China

The US has maintained that it will not export its most advanced chips to China to preserve its technological edge. During an interview with CNBC last month, US Commerce Secretary Howard Lutnick said that Washington would not sell China its top three chip categories and its primary goal was to always stay one step ahead of China.

 

The H20 chip was designed specifically for China and is less powerful than chips sold to US businesses and allies. The administration has stated it will continue to block sales of Nvidia’s most advanced products to China.