Nvidia and AMD Pay 15% of Chip Sales to China to the US
washington, maandag, 11 augustus 2025.
The US government has reached a unique agreement whereby Nvidia and AMD must pay 15% of their revenue from the sale of AI chips to China to the US. This measure, agreed upon during a White House meeting between Nvidia CEO Jensen Huang and President Trump, is designed to regulate technological exports and could generate over $2 billion for the US. Despite the financial burden, both companies are pleased with the opportunity to regain access to the crucial Chinese market, which is essential for their growth.
New Tax on AI Chip Sales to China
The US government has reached a unique agreement whereby Nvidia and AMD must pay 15% of their revenue from the sale of AI chips to China to the US. This measure, agreed upon during a White House meeting between Nvidia CEO Jensen Huang and President Trump, is designed to regulate technological exports and could generate over $2 billion for the US. Despite the financial burden, both companies are pleased with the opportunity to regain access to the crucial Chinese market, which is essential for their growth [1][2][3][4][5][6][7].
Details of the Agreement
According to the Financial Times and Axios, Nvidia and AMD have agreed to pay 15% of their revenue from the sale of AI chips to China to the US government. This agreement was reached during a meeting at the White House last Wednesday. The US Commercial Service began issuing licenses for the sale of Nvidia’s H20 and AMD’s MI308 chips to China on Friday. These licenses were previously prohibited due to concerns over security risks [1][2][3][4][5][6][7].
Impact on Chip Manufacturers
Nvidia and AMD hope that this agreement will grant them access to the Chinese market, which is crucial for their growth. In the fiscal year ending January 26, 2025, Nvidia generated $17 billion in revenue from China, accounting for 13% of their total revenue. AMD reported $6.2 billion in revenue from China in 2024, representing 24% of their total revenue. Although the 15% tax may impose a significant financial burden, both companies view the restored access to the Chinese market as a significant benefit [5][6].
Reactions and Significance
Charlie Dai, an analyst at Forrester, notes that the agreement ‘highlights the high costs of market access in a time of escalating technological trade tensions, creating substantial financial pressure and strategic uncertainty for technology companies.’ Despite criticism from some experts, who argue that the agreement is strategically ill-conceived, Nvidia CEO Jensen Huang believes that ‘the American technology package must become the global standard, just like the US dollar.’ Chinese state media have expressed concern about potential security risks in Nvidia’s H20 chips, but Nvidia denies the presence of backdoors in their products [1][3][5][7].
Trade Policy and Future Implications
The agreement comes at a time when trade relations between Beijing and Washington are easing. Beijing has relaxed controls on rare earth minerals, and the US has lifted restrictions on chip design software companies. Top trade officials from both countries have met several times since the ceasefire on May 10, but there has been no confirmation of an extension of the tariff suspension beyond August 12. The exact implementation details and timelines of the agreement are still unknown, but it is expected that Chinese customers will quickly respond to purchase Nvidia’s H20 chips [3][5][7].