Highlights
- Nvidia and AMD will give 15% of China AI-chip revenue to the U.S. government for export licenses.
- Critics argue revenue-sharing doesn’t solve national security risks and may undermine export-control credibility.
- The agreement marks a new financial-policy tool amid U.S. China trade diplomacy.
There’s been a big update in the chip industry that I think is worth talking about. The US government and two of the biggest chip makers, Nvidia and AMD , have agreed on something new called the Nvidia AMD sales tariff .
Basically, both companies can keep selling certain AI chips in China, but they have to give 15% of their China sales money straight to the US government.
Nvidia AMD Sales Tariff: Why Both Chipmakers Are Paying 15% to the US to Sell in China
What exactly happened
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The whole thing started because the US had banned exports of some high-performance AI chips to China. They said it was for national security reasons, to stop those chips from being used in military AI.
Nvidia and AMD made special versions of their chips, like Nvidia’s H20 and AMD’s MI308 , so they could still sell in China without breaking the rules. But even those were under heavy restrictions.
After months of talks, both companies managed to get a deal. Now, they can export those chips again, but only if they pay this 15% fee to the US Treasury.
It’s not an import tax or a normal tariff; it’s more like a revenue share just for the right to sell in that market.
Image Credits:Timothy DykesonUnsplash
Why this is a big deal
I think what’s surprising here is that export rules have never worked like this before. Normally, if something is a national security risk, you either ban it or you don’t.
But here, the US is allowing the sales to continue, just with a payment. That’s why experts like Deborah Elms from the Hinrich Foundation are saying it doesn’t remove the risk. Even if the chips are meant for civilian companies, there’s still a chance they could end up in military use.
From Nvidia’s side, their CEO Jensen Huang has been pushing for this. He’s argued that if they can’t compete in China, they’ll lose their position in AI leadership globally. The company even compared it to the US losing the 5G race, saying it’s too risky to fall behind.
What does it mean going forward?
Analysts are calling this deal unprecedented because it sets a new model. Instead of blocking trade, the US is charging for it.
It’s also coming at a time when the US and China have been trying to cool down trade tensions, with a 90-day pause on other tariffs.
No one knows how long this will last, but it’s clear it will put more pressure on other tech companies working in China.
It also shows that Washington is willing to experiment with new ways to control tech trade while still making money from it.
The Nvidia AMD Sales Tariff might look like a win for both sides right now. The US gets revenue, and the companies get to keep their market. But it also opens a lot of questions about how national security rules are going to work in the future. For now, it’s a reminder that in the chip industry, politics and business are tied closer than ever.
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