Unprecedented Move: Nvidia and AMD Forced to Pay 15% of China Revenue for Export Rights

TradingKey - According to CNBC, the White House confirmed on the 12th that Nvidia and AMD have agreed to a special arrangement: they will pay 15% of their revenue from sales of certain chips in China to the U.S. government in exchange for export licenses. White House spokesperson Caroline Levitt stated that the agreement currently applies only to these two companies, but could be extended to others. The U.S. Department of Commerce is actively reviewing the legal framework and enforcement mechanisms.

The Financial Times reported that the deal covers Nvidia’s H20 chip, a China-specific model, and AMD’s MI308 chip. The H20, designed to comply with U.S. export controls, has lower performance than the global H100 GPU. In April, the U.S. banned its sale to China and other markets over national security concerns. In July, however, Nvidia CEO Jensen Huang announced during a visit to China that the export ban had been lifted — making the H20 the most advanced AI chip Nvidia can currently sell in the country.

Nvidia responded that the H20 is “not a military product, nor used in government infrastructure,” and emphasized that China already has sufficient domestic chip alternatives, with no reliance on U.S. technology for public sector operations. Nevertheless, Chinese regulators have raised security concerns about the H20 and have asked tech giants such as Alibaba and ByteDance to justify their purchases of the chip over local alternatives.

Reports indicate that China’s internet regulatory authorities have recently asked major tech firms, including Tencent, to pause purchases of Nvidia chips until a data security risk assessment is completed.

These actions reflect China’s strict stance on foreign AI chips — particularly the H20 — under its national security and technology self-reliance strategy. Beijing is actively promoting domestic alternatives, such as Huawei’s chips, to reduce dependency on U.S. suppliers. As a result, SMIC (Semiconductor Manufacturing International Corporation) saw its stock rise amid growing expectations of increased demand for locally produced semiconductors.

Meanwhile, Bloomberg reported that China is also taking a cautious approach toward AMD’s AI accelerator chips, though it remains unclear whether the MI308 is specifically under scrutiny.