In a move signaling tighter U.S. control over advanced technology exports, chipmaking giants Nvidia and AMD have agreed to hand over 15% of their AI chip sales revenue from China to the U.S. government. The revenue-sharing arrangement is part of a broader deal to secure the export licenses needed to continue selling high-performance AI chips to the Chinese market.
The agreement was announced on August 10, following months of negotiations between the companies and U.S. officials. The decision comes amid Washington’s increasing scrutiny of semiconductor exports, driven by national security concerns and competition in the global AI race.
Why the Deal Matters
- Preserves Access to the Chinese Market: China remains a critical buyer of AI chips, accounting for billions in annual revenue for U.S. chipmakers.
- Sets a New Precedent: The deal marks one of the first instances where the U.S. government will directly benefit financially from semiconductor exports.
- National Security Leverage: The arrangement reflects Washington’s strategy of controlling advanced chip technologies while still allowing limited trade.
Impacts on the Semiconductor Industry
Industry analysts say the revenue-sharing model could reshape U.S. technology export policies. Smaller chip companies may struggle to match the compliance and financial requirements of such agreements, potentially consolidating market power in the hands of major players like Nvidia and AMD.
Global Trade and Geopolitics
The deal comes at a time of heightened U.S.–China trade tensions, with advanced semiconductors at the center of the dispute. While Washington has restricted the export of cutting-edge chips, this compromise allows continued business under strict oversight—balancing economic interests with strategic priorities.
With AI demand surging worldwide, the arrangement may become a model for how the U.S. handles other high-tech exports to countries deemed strategic competitors.
