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18.96
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Impact LevelMedium
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Scope LevelNational
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Last Update2025-08-11
Event Overview
The U.S. government's policy requiring semiconductor firms to surrender a percentage of revenue from specific international sales highlights tensions between economic interests and export control strategies. This regulatory approach underscores efforts to balance technological competitiveness with geopolitical concerns, impacting global supply chains and corporate revenue models in the AI hardware sector.
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U.S. to Take 15% Revenue from Nvidia and AMD China AI Chip Sales
The U.S. government, under President Donald Trump’s administration, has reached an agreement requiring Nvidia and AMD to pay 15% of their China AI chip sales revenue to the federal government. In return, the two semiconductor companies will receive export licenses to sell specific AI chips — Nvidia’s H20 and AMD’s MI308 — in China.
The arrangement is considered unusual by analysts and reflects a transactional approach by the current administration. Previously, sales of such high-performance chips to China were restricted under export control rules, with Nvidia’s H20 chip specifically designed to comply with U.S. requirements. The H20 had also been barred under earlier curbs, but Nvidia recently indicated it expected to resume shipments.
Nvidia stated to NBC News: “We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.” AMD has not commented publicly on the agreement as of the latest reports.
From an investor standpoint, the development is seen positively, as it restores access to the Chinese market for both companies. Market reaction reflected this sentiment, with AMD shares up more than 2% and Nvidia shares seeing modest gains on Monday. Ben Barringer, global technology analyst at Quilter Cheviot, remarked, “85% of the revenue is better than zero. The question will be whether Nvidia and AMD adjust their prices by 15% to account for the levy, but ultimately it’s better that they can sell into the market rather than hand the market over entirely to Huawei.”
George Chen, partner and co-chair of the digital practice at The Asia Group, added that while the agreement provides short-term certainty for exports to China, the long-term outlook is less clear, and the U.S. could seek a larger percentage of revenue in the future if sales grow.