What's happened
As of August 2025, Nvidia and AMD agreed to pay the US government 15% of revenues from sales of their AI chips, Nvidia's H20 and AMD's MI308, to China. This unprecedented revenue-sharing deal was a condition for export licenses allowing resumed sales after an earlier ban. The arrangement has sparked national security concerns and criticism from export control experts.
What's behind the headline?
Unprecedented Monetization of Trade Policy
The deal between the US government and chipmakers Nvidia and AMD marks a historic shift in trade policy by monetizing export licenses through a revenue-sharing model. This arrangement blurs the traditional firewall between national security considerations and financial interests, raising serious concerns about conflicts of interest and crony capitalism.
National Security vs. Revenue Generation
Export controls have long been justified on national security grounds to prevent sensitive technology from enhancing China's military and AI capabilities. However, tying export approvals to payments incentivizes the government to approve more licenses to increase revenue, potentially compromising security assessments.
Impact on US-China Trade Relations
While the deal opens a path for US companies to access the lucrative Chinese market despite stringent export controls and tariffs, it introduces instability and unpredictability. Other tech firms face uncertainty about whether similar revenue-sharing demands will be imposed, complicating business planning and international relations.
Political and Corporate Dynamics
President Trump's direct involvement and demands for revenue shares reflect a transactional approach to trade policy, diverging from the deliberative inter-agency processes of previous administrations. This raises questions about fairness, transparency, and the criteria for allocating investment funds tied to trade agreements.
Forecast and Consequences
This revenue-sharing precedent will likely encourage the Trump administration to apply similar models across other industries, potentially reshaping US trade policy into a pay-to-play system. It risks eroding trust in US export controls, invites legal challenges, and may provoke retaliatory measures from China, further complicating the geopolitical landscape.
Reader Impact
For readers, this story highlights how geopolitical tensions and trade policies directly influence the technology products available globally and the ethical considerations behind government-business interactions. It underscores the growing intertwining of commerce, national security, and politics in the tech sector.
What the papers say
The Financial Times first revealed the deal, describing it as "unprecedented and dangerous," with former export control official Christopher Padilla calling it "a mix of bribery and blackmail" (Mike Bedigan, The Independent). The South China Morning Post highlighted concerns about conflicts of interest, noting that "the more export licenses it issues, the more revenue it collects," potentially compromising national security assessments. Bloomberg and The Guardian confirmed the 15% revenue share from Nvidia's H20 and AMD's MI308 chip sales to China, emphasizing the deal's novelty and the Trump administration's role in negotiating it. Al Jazeera quoted experts warning that "charging a fee in exchange for relaxing national security export controls is a terrible precedent," while Nvidia stated it "follows US government rules" and hopes export controls "will let America compete in China and worldwide." The Guardian also reported Chinese state media raising security concerns about Nvidia's chips, illustrating the geopolitical tensions underlying the deal. These varied perspectives reveal a complex narrative of economic opportunity, national security risk, and political maneuvering shaping US-China tech trade.
How we got here
The US imposed export controls on advanced AI chips to China in early 2025, citing national security risks amid US-China tech rivalry. Nvidia and AMD's chip sales to China were halted in April. After negotiations, the Trump administration reversed the ban for specific chips, requiring the companies to share 15% of sales revenue with the US government to obtain export licenses.
Go deeper
- How does the revenue-sharing deal affect US national security?
- What are the implications for other tech companies in the US?
- How has China responded to the export license approvals?
Common question
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What Are the Details of the Nvidia Chip Smuggling Case?
Recently, two Chinese nationals were charged in Los Angeles with illegally exporting Nvidia AI chips to China. They allegedly used a complex network of freight companies in Singapore and Malaysia to bypass US export controls. This case highlights the ongoing tensions between the US and China over advanced technology and national security. Curious about how this case unfolded and what it means for global tech relations? Keep reading for detailed insights and answers to your questions.
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Why Did the US Reverse the Nvidia Chip Export Ban to China?
The US government's decision to lift the export restrictions on Nvidia's AI chips for China has sparked widespread interest. This move marks a significant shift in US-China tech relations and raises questions about its impact on global supply chains, AI development, and national security. Below, we explore the reasons behind this reversal and what it means for the future of technology and international trade.
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Why Did the US Ease Export Restrictions on Nvidia Chips?
The US has recently relaxed some export restrictions on Nvidia's advanced AI chips, sparking questions about what this means for China and the global tech landscape. This move marks a shift in US-China tech tensions, raising questions about the future of semiconductor exports, enforcement efforts, and the impact on the tech industry. Below, we explore the key details and what they could mean for you.
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How Are US-China Relations Affecting Global Tech and Security?
The ongoing tensions between the US and China are shaping the future of global technology and security. Recent developments include eased export restrictions for certain Nvidia chips, but also increased enforcement against illegal shipments. This complex landscape raises questions about supply chains, international trade, and security risks. Below, we explore the key issues and what they mean for the tech industry and global stability.
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Why Are US Firms Sharing AI Chip Revenues With China?
In August 2025, US tech giants Nvidia and AMD agreed to share 15% of their AI chip revenues from China with the US government. This unprecedented move raises questions about the future of US-China tech relations, national security, and global AI development. Why are these companies making such deals, and what does it mean for the tech industry? Below, we explore the key questions surrounding this controversial revenue-sharing agreement.
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Why Are US Chip Companies Sharing Revenue with China?
In August 2025, Nvidia and AMD agreed to share 15% of their AI chip revenues with the US government to resume sales to China. This unprecedented deal raises questions about national security, trade policies, and the future of US-China tech relations. Curious about what this means for global trade and security? Keep reading to find out.
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