Summary:
Nvidia and AMD negotiated unprecedented agreements to share 15% of revenues from U.S.-approved AI chips (H20 and MI308) sold in China with the U.S. government in exchange for export licenses. This arrangement emerges amid escalating semiconductor trade tensions, revealing how the Biden administration uses revenue-sharing as a novel bargaining tool to maintain market access while advancing domestic tech policy objectives. The deal balances corporate interests with national security priorities as U.S.-China tech deceleration accelerates.
What This Means for You:
- Supply Chain Contingency Planning: Audit your chip procurement pipelines for exposure to sanctioned H20/MI308 processors and develop alternative sourcing strategies
- Tariff Risk Mitigation: Factor 15% revenue-sharing costs into China-market pricing models for AI infrastructure projects
- Compliance Protocol Updates: Review export control compliance frameworks (EAR Part 744) for alignment with new revenue-sharing license conditions
- Geopolitical Warning: Anticipate further market fragmentation as revenue-sharing precedents incentivize localization requirements globally
Original Post:
A smartphone with a displayed AMD logo is placed on a computer motherboard.
Florence Lo | Reuters
Nvidia and Advanced Micro Devices have agreed to give the U.S. government a share of revenues from certain chips sold in China, the Financial Times reported, in an unprecedented arrangement with the White House.
In exchange for 15% of revenues from the chip sales, the two chipmakers will receive export licenses to sell Nvidia’s H20 and AMD’s MI308 chips in China according to the FT.
Nvidia stated: “We follow rules the U.S. government sets for our participation in worldwide markets.” This development follows former President Trump’s recent semiconductor tariff proposals.
Extra Information:
- BIS Entity List Controls – Critical context on U.S. export restrictions affecting semiconductor trade
- CRS Report on U.S.-China Tech Competition – Details regulatory frameworks shaping these negotiations
People Also Ask About:
- What percentage of revenue must Nvidia/AMD share? The agreement specifies a 15% revenue share on approved China-bound chips.
- Which specific products are affected? Nvidia’s H20 and AMD’s MI308 AI accelerators designed for Chinese markets.
- How will this impact consumer electronics? Immediate effects concentrated in enterprise AI infrastructure, not consumer devices.
- Are other chipmakers following suit? Market analysts anticipate Intel and others may face similar negotiations.
Expert Opinion:
“This revenue-sharing model represents a paradigm shift in export controls,” notes Georgetown Center for Security and Emerging Technology fellow Hideki Tomoshige. “It transforms trade barriers into profit-sharing mechanisms that could reshape how nations negotiate technology access while maintaining strategic advantage in critical compute sectors.”
Key Terms:
- U.S.-China semiconductor revenue sharing agreement
- AI chip export license compliance requirements
- Nvidia H20 GPU China market restrictions
- AMD MI308 accelerator tariffs
- Semiconductor trade war mitigation strategies
- Technology export control profit-sharing models
- Compute infrastructure geopolitical risk management
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