NVIDIA and AMD Owed 15% of China AI Chip Export Revenues to the U.S. Government

NVIDIA and Advanced Micro Devices (AMD) will remit 15% of their revenue from Chinese GPU exports to the U.S. government under a newly disclosed agreement

First reported by the Financial Times on Sunday, the arrangement reveals former President Trump initially demanded a 20% revenue share from NVIDIA's Chinese clients. The chipmaker secured a 5% discount through negotiations with CEO Jensen Huang. "The 15% payment reflects the complexity of technology trade negotiations," noted Forrester analyst Alvin Nguyen. "This appears to represent a reversal of recent efforts to restrict AI technology sales to China."

In 2022, the Biden administration implemented regulations banning advanced GPU exports to China. In response, NVIDIA and AMD developed downgraded versions - the H20 and MI308 chips - that fall below the performance thresholds triggering export restrictions

Earlier this year, the Trump administration expanded the ban to include these modified chips. This decision cost NVIDIA an estimated $8 billion in Q2 revenue, while AMD anticipated $1.5 billion in annual sales losses

Following the H20 export halt, Huang disclosed NVIDIA's Chinese market share dropped from 95% to 50%. Subsequent executive meetings with Trump reportedly produced a "breakthrough" leading to the Commerce Department lifting the ban

"The H20 is outdated," Trump declared in today's press briefing. "It's an old chip that China already possesses in different forms or names."

The administration may now permit exports of modified Blackwell architecture chips, but with "negative enhancements" that reduce performance by 30-50%. This follows a pattern established with previous products - the H20 is a slower version of NVIDIA's H100 chip delivering up to 400 teraflops, while the B200 Blackwell offers 200 teraflops. A new Blackwell Ultra variant recently introduced provides 50% faster processing for specific workloads

Global demand for GPU solutions remains strong, but Chinese sales restrictions have significantly impacted revenue streams for NVIDIA, AMD and Intel. Analysts suggest these policies serve as strategic negotiation tools during U.S.-China trade talks

In early 2024, the U.S. paused tariffs on certain Chinese imports to facilitate trade agreements. After today's announcement, Trump signed an executive order extending these tariff suspensions for 90 days. Hargreaves Lansdown analysts estimated reinstating H20 exports could add $15-20 billion to NVIDIA's annual revenue. The company recently launched RTX PRO processors targeting manufacturing and logistics sectors, claiming full compliance with U.S. export regulations