Nvidia and AMD must pay the U.S. a portion of revenue for selling AI chips in China

The Trump administration has struck an unusual deal with Nvidia and AMD, requiring both companies to hand over 15 percent of their revenue from certain AI chip sales in China to the U.S. government.

According to the Financial Times, which cites sources familiar with the matter and a U.S. official, these payments are a condition for the recently granted export licenses allowing Nvidia and AMD to sell specific chips in China.

The agreement covers Nvidia's H20 chip and AMD's MI308 - both stripped-down AI accelerators designed for the Chinese market that would otherwise be blocked under current export controls.

The licenses were reportedly issued just two days after Nvidia CEO Jensen Huang met with Donald Trump at the White House. Export control experts told the Financial Times no U.S. company had ever had to pay a portion of its revenue for export licenses.

Security Concerns Brushed Aside

The deal has sparked heated debate in Washington. In an open letter to Commerce Secretary Howard Lutnick, 20 national security experts - including former deputy national security advisor Matt Pottinger - urged the administration not to issue H20 licenses, warning the chip is a powerful accelerator for China's frontier AI capabilities and could ultimately benefit the Chinese military.

Nvidia has pushed back, calling these concerns misguided and arguing that the H20 is not suitable for military use.

The agreement comes at a tense moment in U.S.-China relations, with Trump seeking a summit with Xi Jinping. According to the Financial Times, the Commerce Department has been told not to impose new export controls for now, in order to avoid angering Beijing. Meanwhile, China is pushing for looser controls on high-bandwidth memory (HBM) chips - a critical component for advanced AI systems.