Nvidia and AMD agree to pay US government 15% of China revenue for export licences

In a highly unusual move to resume sales to China, US chipmakers Nvidia and AMD have agreed to pay the US government 15% of their Chinese revenues from specific high-powered chips, sources have told the BBC.

This “unprecedented” deal allows the companies to bypass strict export controls previously imposed by the US on chips vital for artificial intelligence development.

The agreement covers Nvidia’s H20 chip and AMD’s MI308 chip, both of which were designed for the Chinese market but were recently banned due to national security concerns.

The Trump administration and a group of security experts had expressed “deep concern” that these chips could accelerate China’s AI capabilities, potentially enabling “autonomous weapons systems” and other military applications.

Nvidia issued a statement saying, “We follow rules the US government sets for our participation in worldwide markets,” adding that it hopes “export control rules will let America compete in China and worldwide.”

However, trade policy analyst Deborah Elms of the Hinrich Foundation questioned the effectiveness of the deal, stating, “If you have a 15% payment, it doesn’t somehow eliminate the national security issue.”

Charlie Dai, a vice president at Forrester, called the arrangement “unprecedented” and noted that it creates “substantial financial pressure and strategic uncertainty” for tech vendors operating in the region.

The agreement comes amid a period of easing trade tensions between Washington and Beijing, including a 90-day truce in their tariff war. While the deal provides a pathway for US tech companies to return to the lucrative Chinese market, it also underscores the increasing cost of doing business and the complex relationship between national security and global commerce.