Computer chips are among the products that the US relies on China for / Public domain image
by Worthy News Washington D.C. Bureau Staff
(Worthy News) – In a rare and controversial arrangement, Nvidia and Advanced Micro Devices (AMD) have agreed to share 15% of revenues from certain AI chip sales to China with the U.S. government, paving the way for the resumption of exports halted earlier this year over national security concerns.
The Trump administration began issuing licenses Friday for Nvidia’s H20 AI chip and AMD’s MI308 chip after months of negotiations. The agreement, confirmed by President Trump on Aug. 11, is expected to net the government billions in revenue–$2 billion from Nvidia alone–based on projected demand.
Trump said he initially sought a 20% cut but settled on 15% after talks with Nvidia CEO Jensen Huang. “So we negotiated a little deal. He’s selling an essentially old chip,” Trump remarked, downplaying the H20’s capabilities while emphasizing that the Blackwell chip–Nvidia’s newest and most powerful processor–remains off the table for export.
The deal comes amid heightened U.S.-China trade tensions and as the 90-day tariff truce between the two nations nears its Aug. 12 expiration. Both countries had agreed in May to lower tariffs while trade talks continued temporarily. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer have signaled that another extension could be possible.
Unusual Arrangement Raises Eyebrows
The pay-to-export framework is drawing criticism from lawmakers and policy experts. Rep. Raja Krishnamoorthi (D-Ill.), ranking member of the House Select Committee on China, called it “a dangerous misuse of export controls that undermines our national security,” warning that such deals should be based on security–not revenue.
Derek Scissors, senior fellow at the American Enterprise Institute, questioned the legality of the arrangement, arguing that a 15% “fee” is indistinguishable from an export tax, which would be unconstitutional.
Market analysts also expressed concern. “If the U.S. government is willing to exchange national-security risks for money, that would be good news for Nvidia and AMD–but troubling for national policy,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Balancing Security and Competition
Nvidia designed the H20 specifically for the Chinese market in 2023 after the Biden administration restricted exports of more advanced chips. Commerce Secretary Howard Lutnick called the H20 “our fourth-best” chip, noting that the U.S. won’t send China its top-tier technology.
Supporters of the deal argue it keeps American chipmakers competitive in a massive market while adhering to export controls. Opponents warn it risks accelerating China’s AI capabilities, which could bolster its military and technology sectors.
Market Reaction
Despite the controversy, Wall Street responded positively. Nvidia shares rose 0.5% to $184, up 33% year-to-date, while AMD gained 1% to $176, bringing its 2025 gains to nearly 46%.
As U.S.-China trade talks continue, Trump left the door open for similar arrangements with other tech exports–but signaled any decision on Nvidia’s next-generation Blackwell chip would require “another meeting.”
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