**Nvidia and AMD to Share AI Chip Revenue with US Government**
Nvidia Corp. and Advanced Micro Devices Inc. have reached an agreement to allocate 15% of their revenues from AI chip sales in China to the US government in exchange for export licenses. This unusual arrangement could create unease among both American companies and Chinese authorities. According to sources familiar with the situation, Nvidia intends to share 15% of its revenue from the H20 AI accelerator sales in China, while AMD will do the same with its MI308 revenues.
This deal reflects a broader trend initiated during the Trump administration, which sought financial returns for the US in exchange for trade concessions. The administration has previously shown a willingness to ease trade restrictions, such as tariffs, in return for significant investments in the US, exemplified by Apple Inc.’s commitment to invest $600 billion in domestic manufacturing. However, this specific export tax arrangement is unprecedented in modern corporate history.
Beijing has increasingly opposed the deployment of the H20 chip by Chinese firms and is unlikely to embrace the concept of a chip tax. A social media account linked to state-run China Central Television criticized the chip’s alleged security flaws and inefficiencies, indicating the Chinese government’s stance.
Experts have raised concerns about the implications of this arrangement. Jacob Feldgoise, a researcher at the Center for Security and Emerging Technology, noted that this unprecedented quid pro quo could undermine the national security rationale behind US export controls. He warned that it might weaken the US’s negotiating position with allies regarding complementary controls, as they may doubt US policymakers’ commitment to national security if they are willing to compromise for economic gains.
An Nvidia spokesperson stated that the company adheres to US export regulations and expressed hope that the new rules would enable US companies to compete in China, despite not having shipped H20 chips to the country for several months. AMD has not yet commented on the matter.
This development follows reports that the US Commerce Department began issuing H20 licenses shortly after Nvidia CEO Jensen Huang’s meeting with Trump. Huang has long advocated for lifting restrictions, arguing that isolating China could hinder the spread of American technology and bolster local competitors like Huawei Technologies Co. Analysts suggest that this arrangement may serve as a strategic bargaining tool for the US in trade negotiations with China, but it could also deter Nvidia and AMD from expanding further into the world’s largest chip-importing market.
**FAQ**
**Q: What is the significance of Nvidia and AMD sharing revenue with the US government?**
A: This agreement marks a unique approach to export controls, potentially impacting US-China trade relations and the competitive landscape for American tech companies in China.
