Nvidia, AMD to Hand Over $3 Billion Chip Revenue to U.S.

- Landmark deal requires chipmakers to pay U.S. 15% of China AI chip revenue - Nvidia’s H20 sales alone could contribute over $3 billion to the U.S. treasury On August 10, 2025, the *Financial Times* reported that Nvidia and AMD finalized an unprecedented agreement with the U.S. government. Under the deal, the companies will allocate 15% of their revenue from artificial intelligence chips sold in China to the U.S. This arrangement was a condition for obtaining export licenses amidst escalating U.S.-China trade restrictions. The agreement, which applies specifically to Nvidia’s H20 chip and AMD’s MI308 model, was finalized after prolonged negotiations, and the government issued the licenses during the week of August 4. The *Financial Times* also reported that a meeting between Nvidia CEO Jensen Huang and President Donald Trump in June 2025 set the stage for this revenue-sharing arrangement. Both companies designed their chips to comply with U.S. export regulations, which enables continued access to the lucrative Chinese market. According to the report, analysts predict Nvidia could generate $23 billion in sales from 1.5 million units of the H20 chip this year, which would translate to over $3 billion in payments to the U.S. treasury. However, the government has not disclosed its plans for using these funds. This agreement marks a historic shift in U.S. export control policies, as it is the first time American companies have agreed to such terms to gain export clearance. However, critics warn that granting licenses for advanced AI chips could bolster China’s military and artificial intelligence capabilities. In response, Nvidia countered these concerns, asserting the H20 chip lacks direct military applications and highlighting that access to the Chinese market is necessary to sustain U.S. tech dominance. “Nvidia follows rules the U.S. government sets for our participation in worldwide markets,” said a company spokesperson. AMD has declined to comment.