Nvidia Corp (NASDAQ:NVDA, ETR:NVD) and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) have struck an unprecedented agreement to pay the US government 15% of their revenues from chip sales in China to secure export licences.
This follows US restrictions on advanced chips, particularly those used in artificial intelligence, amid national security concerns. Nvidia’s H20 chip, designed for the Chinese market, and AMD’s MI308 chip are central to the deal.
Security experts warn these AI chips could boost China’s military capabilities, despite being sold to civilian firms.
Nvidia CEO Jensen Huang has actively lobbied for resumed sales, including a meeting with President Trump.
The arrangement highlights the high financial and strategic costs companies face amid US-China tech tensions.
While trade relations show signs of easing, uncertainty remains, with tariffs temporarily paused and ongoing diplomatic talks.
Nvidia and AMD’s move reflects the complex balance between market access and national security pressures.