Nvidia Corp (NASDAQ:NVDA, ETR:NVD) and Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD)’s new deal to hand over 15% of their chip sales revenue in China to the US government is a game-changer that export controls, usually about national security, into a way for the government to collect money, according to analysts.
The deal centers on Nvidia’s H20 chip and AMD’s MI308 chip, both specifically designed for the Chinese market amid ongoing US export restrictions on advanced chips used in artificial intelligence applications, citing national security concerns.
The move lets the two tech giants get back into China’s huge market despite ongoing restrictions, but experts are worried it could shake up global trade rules and create uncertainty for businesses around the world.
Wedbush analysts noted the rapid approval of export licenses as a win for both Nvidia and AMD after earlier questions around when AI chip or server exports might resume.
But the 15% payment to the US government means both chipmakers will either have to raise prices, potentially hurting demand, or accept lower-than-expected profit margins, or some mix of the two.
“Conceptually, we view this decision by the US government to levy a charge for certain foreign companies to procure US technology as worrisome,” analysts wrote, “given it opens the door for the US to selectively tax a variety of companies/products that enjoy technology leadership positions.”
Nigel Green, CEO of global financial advisory deVere Group, was more critical, calling the deal “a never-before-seen move” that “risks recasting export controls as financial transactions and undermining the foundations of global trade.”
“This is the first time in US history that access to export licences has been monetized in this way,” the deVere head noted.
Green warned that turning export controls into “revenue-sharing schemes” changes their purpose and “sends a destabilizing message to global markets.”
The arrangement could become a template leading other countries to impose similar pay-to-play trade restrictions, which would make international supply chains less predictable, raise costs, and force companies to build costly redundancy into operations, according to Green.
“The long-term risk is systemic,” Green added. “It’s about whether the US – and by extension the global trading system – can maintain rules that are applied transparently, not traded for revenue. Without that, trust will unravel, and markets will respond.”
The deal follows a reversal by the Trump administration of an earlier outright ban on Nvidia’s H20 chip, with licenses beginning to be issued shortly after a meeting between Nvidia CEO Jensen Huang and President Donald Trump.
While the 15% levy will channel billions into the US Treasury, some US security officials remain concerned that these chips could enhance China’s AI capabilities in ways that indirectly bolster its military. Proponents argue the deal allows US companies to stay competitive in the critical Chinese market while supporting national priorities.
Kathleen Brooks, senior analyst at XTB, said investors may view the arrangement positively as “a small price to pay for access to China’s market.” She noted Nvidia’s H20 sales to China are expected to exceed $20 billion annually, potentially making the revenue-sharing a lucrative source for the US Treasury.
Swissquote Bank’s Ipek Ozkardeskaya highlighted the unusual nature of “paying the US government to soften export policies — originally designed to control national-security risks.”
“If the US government is willing to exchange national-security risks for money, that would be good news for Nvidia and AMD,” Ozkardeskaya said.
“However, this arrangement will hardly guarantee the end of export restrictions, as the US government is not primarily driven by financial considerations — especially when it comes to national security issues.”