Nvidia, AMD Revenue-Sharing Deal with U.S. Called Unique

A “unique” deal that Nvidia and AMD have apparently struck, in which a levy of 15% of their sales from China will be paid to the U.S. government, probably includes an agreement by the White House to ease export controls, according to analysts who spoke to EE Times. The deal comes as Trump has also said he aims to levy a tariff of up to 100% on chip imports in the U.S. in the coming weeks.

Nvidia and AMD made a revenue-sharing agreement with the U.S. government, the Financial Times and other news media reported on Aug. 11. The U.S. White House didn’t comment on its website.

“We follow rules the U.S. government sets for our participation in worldwide markets,” Nvidia told EE Times in a prepared statement. “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.  America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.”

The administration of U.S. President Donald Trump, in mid-July, revoked export-control rules on Nvidia’s H20 sales to China. Nvidia didn’t respond to EE Times questions on whether the company will shift some of its sales revenue from China to the U.S. government. AMD didn’t reply to EE Times.

A revenue-sharing deal providing eased export controls on AMD’s MI308 and Nvidia’s H20 would be unique, Dan Hutcheson, vice chair of TechInsights, told EE Times. The move by the Trump administration is a test that signals a new chapter in presidential power with a policy of “inverted tariffs,” he added.

“The U.S. government’s taking 15% of Nvidia’s and AMD’s AI semiconductor sales to China is unique,” Hutcheson said. “Trump says he loves tariffs, and now he’s being very creative by inventing the inverted tariff. I do not know of and cannot find any instance of a product and company-specific tax on sales to a specific foreign country.”

The deal would be rare, if not unprecedented, Futurum Group Research Director Ray Wang told EE Times. 

“It remains unclear how the U.S. government will use the funds from AMD and Nvidia, but it could represent another tool for raising revenue alongside its global tariff arrangements,” Wang said. “That said, I doubt the administration will permit unrestricted sales of more AI chips to China, given that previous export controls remain in place.”

China accounted for 24% of AMD’s revenue and 13% of Nvidia’s revenue in 2024. Trump may want as much as 20% of Nvidia’s China revenue from the H20.

“The H20 is obsolete,” Reuters reported Trump as saying, suggesting that China somehow got plenty of the banned H20s. “I said, ‘Listen, I want 20% if I’m going to approve this for you, for the country’,” Reuters reported, citing Trump.

Nvidia CEO Jensen Huang has made multiple trips between Washington and Beijing in recent months to negotiate for a truce as the tech war between the U.S. and China escalates.

The deal comes as Trump has also said he aims to levy a tariff of up to 100% on chip imports in the U.S. in the coming weeks.

The Nvidia deal with the U.S. government means the company’s H20 sales in China will be “better than nothing,” Wells Fargo senior chip analyst Aaron Rakers said in an interview with CNBC.

Uncomfortable precedent

The “unusual agreement” creates an uncomfortable precedent for all parties involved in the short and long run, Counterpoint Research VP Neil Shah said in a prepared statement.

“For the chipmakers, it offers some reprieve by increasing their shrinking addressable market, considering most of the world’s products from smartphones to servers are manufactured in China,” Shah said. “It also sets a dangerous future precedent to share part of their revenues to the U.S. government for countries or companies of which the U.S. government doesn’t approve. Technically, it’s an indirect tariff at source.”

For the tech ecosystem, the deal restores some trade balance, but at a heavy financial and geopolitical cost, Counterpoint said, adding that similar deals could give some economies leverage to adopt similar access fees, further fueling a trade war. 

“With all these developments, there is a growing trust erosion creeping in between all parties, and this will further accelerate fragmentation of technology and trade across economies,” Shah said.

While the Trump administration has made notable concessions in prior talks with Beijing, it’s uncertain whether more will follow in future negotiations, Wang said. 

“I don’t see this latest step as a shift in the broader tech competition policy with China, but the revenue-sharing approach is a development worth watching closely to determine whether it’s a one-off anomaly or the start of a new policy pattern.”