Selling advanced chips to China just got a whole lot pricier for Nvidia and AMD.
In what one analyst calls an “unprecedented” deal, the tech giants have agreed to hand over 15% of their China revenues.
This will go to the U.S. government. This is in exchange for export licenses.
Why the drama? Washington had banned sales of high-powered AI chips to China, citing national security concerns.
What’s The Reason?
Security experts warned Nvidia’s H20 chip could supercharge China’s military AI.
Think autonomous weapons, advanced surveillance, and faster battlefield decision-making.
AMD’s MI308 chip faced similar scrutiny.
“Either you have a national security problem or you don’t,” said Deborah Elms of the Hinrich Foundation.
“A 15% payment doesn’t erase the risk.”
The chips were originally designed for the Chinese market after Biden-era restrictions in 2023, but Trump’s administration halted sales in April.
Nvidia CEO Jensen Huang has since lobbied both Washington and Beijing for a restart.
The agreement comes amid a fragile U.S.-China trade truce and ongoing tariff talks.
But it’s a costly compromise — one that underscores how market access in the world’s second-largest economy now comes with a hefty toll.
As one analyst put it: in the chip wars, the bill is high, the rules keep changing, and everyone’s still playing.
