NVIDIA and AMD Turn into “Revenue Streams” for the U.S. Government?
Media reports reveal that, as a condition for obtaining licenses to export AI chips to China, NVIDIA and AMD must pay the U.S. government 15% of their China AI chip sales revenue.
The agreement specifically covers sales of NVIDIA H20 and AMD MI308 chips, export licenses for which were granted last week.
This unusual arrangement is a first in U.S. trade policy. Export control specialists say no American company has previously agreed to hand over a share of revenue in exchange for an export license. By securing a 15% cut, the U.S. government effectively becomes a partner in NVIDIA and AMD’s China business.
The announcement sparked immediate controversy, with critics accusing the Trump administration of using “national security” as a pretext to profit from export controls.
China is a key market for both companies. In the fiscal year ending January 26, NVIDIA earned $17 billion from China—13% of its total revenue—while AMD reported $6.2 billion in 2024 from China, making up 24% of its sales.
Bernstein Research estimates that by year’s end, NVIDIA will have sold over 1.5 million H20 chips in China, generating about $23 billion in revenue. AMD is projected to record $800 million in China chip sales.
That means the deal could deliver over $2 billion (about 14.4 billion RMB) directly to the U.S. Treasury.
“We follow the rules the U.S. government sets so we can compete globally,” an NVIDIA spokesperson said. “Although we haven’t shipped H20s to China for months, we hope export control policy will allow the U.S. to remain competitive both in China and worldwide.”
AMD has yet to comment.
“This is absurd,” said Jeff Gertz, a senior fellow at the Center for a New American Security. “Either H20 sales to China are a security risk, in which case they shouldn’t happen at all, or they’re not—and then why impose an extra penalty?”
Alastair Phillips-Robbins, a former Commerce Department advisor under the Biden administration, was also critical:
“If true, this shows the government is trading away national security measures for revenue.”
U.S. Commerce Secretary Howard Lutnick told CNBC last month:
“We don’t sell China our best products, not the second-best, or even the third-best. The plan to resume AI chip sales is tied to negotiations with China over rare earths.”
Lutnick stressed that the goal is to keep China using U.S. chips so it remains locked into the American technology ecosystem (“technology stack”). The Trump administration maintains that selling H20 and similar chips poses no threat to U.S. national security.