The U.S. government has reached a groundbreaking agreement with Nvidia and AMD, allowing the two American semiconductor giants to resume sales of advanced artificial intelligence chips to China. The deal marks a major shift from previous export restrictions that had effectively banned shipments of Nvidia’s H20 chips and AMD’s MI308 chips to the Chinese market due to national security concerns.
Over the past year, tensions over technology exports had intensified, with Washington citing fears that advanced chips could bolster China’s AI capabilities in ways that might threaten U.S. interests. Despite this, China remained one of the most lucrative markets for AI hardware, accounting for billions of dollars in annual sales for both companies.
Details of the Agreement
Under the new arrangement, Nvidia and AMD will be required to pay 15 percent of their revenues from AI chip sales to China directly to the U.S. government. This fee applies specifically to high-performance chips that had previously been restricted, including Nvidia’s H20 model and AMD’s MI308 series.
In return, the U.S. Commerce Department has begun issuing export licenses, effectively lifting the blockade that had halted shipments. The agreement allows the companies to re-enter a market they had been locked out of for months, regaining access to Chinese tech firms eager for advanced AI hardware.
Nvidia confirmed it is complying with U.S. regulations and expressed optimism that the updated rules will keep American technology competitive on the global stage. AMD has not issued a public statement, but industry analysts note that the deal represents a significant commercial opportunity for both companies, despite the revenue-sharing requirement.
Reaction and Implications
The 15 percent levy is an unusual move in the context of U.S. export policy, which has traditionally focused on security measures rather than direct financial arrangements. Some industry experts question whether such a model should apply to other sensitive technologies, warning that it blurs the line between safeguarding national interests and monetizing export permissions.
For Nvidia and AMD, the deal offers a vital lifeline to one of the world’s largest and fastest-growing AI markets. However, it also imposes a cost that could influence pricing strategies, supply chain decisions, and future product designs. For Washington, it represents a way to exert continued oversight over critical technology exports while securing a share of the resulting economic gains.
What remains unclear is how the collected revenue will be used and whether similar agreements might be extended to other industries facing export restrictions. The arrangement signals a new chapter in the complex interplay between technology, trade, and geopolitics—one that could redefine the rules of global competition in the AI era.
