- Nvidia and AMD will give the US 15% of revenue from advanced chip sales to China
- US halted Nvidia H20 chip sales to China in April but recently allowed resumptions
- Nvidia earned $17bn and AMD $6.2bn from China, significant portions of their revenue
Nvidia and AMD have agreed to give the US government 15 per cent of revenue from sales to China of advanced computer chips like Nvidia's H20 that are used for artificial intelligence applications, a US official told Reuters on Sunday.
US President Donald Trump's administration halted sales of H20 chips to China in April, but Nvidia last month announced that the US said it would allow the company to resume sales, and it hoped to start deliveries soon.
Another US official said on Friday that the Commerce Department had begun issuing licenses for the sale of H20 chips to China.
When asked if Nvidia had agreed to pay 15 per cent of revenues to the US, a Nvidia spokesperson said in a statement, "We follow rules the US government sets for our participation in worldwide markets."
The spokesperson added: "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide."
AMD did not respond to a request for comment on the news, which was first reported by the Financial Times earlier on Sunday. The US Department of Commerce did not immediately respond to a request for comment.
China's foreign ministry did not immediately respond to a request for comment.
China represents a significant market for both companies. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13 per cent of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24 per cent of total revenue.
The Financial Times said the chipmakers agreed to the arrangement as a condition for obtaining the export licences for their semiconductors, including AMD's MI308 chips. The report said the Trump administration had yet to determine how to use the money.
"It's wild," said Geoff Gertz, a senior fellow at Center for New American Security, an independent think tank in Washington, D.C.
"Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not a national security risk, in which case, why are we putting this extra penalty on the sale?"
US Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of US negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC.
Lutnick said it was in US interests to have Chinese companies using American technology, even if the most advanced was prohibited from export, so they continued to use an American "tech stack."
The US official said the Trump administration did not feel the sale of H20 and equivalent chips was compromising US national security. The official did not know when the agreement would be implemented or exactly how, but said the administration would be in compliance with the law.
Alasdair Phillips-Robins, who served as an adviser at the Commerce Department during former President Joe Biden's administration, criticised the move.
"If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," Phillips-Robins said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
