In a move that underscores Washington’s growing involvement in strategic technology trade, the Trump administration has secured an agreement with Nvidia and Advanced Micro Devices to receive 15 percent of their revenue from artificial intelligence chip sales to China. The arrangement follows months of negotiations and comes amid heightened scrutiny over U.S. tech exports to the world’s second-largest economy.
The deal emerged after Nvidia received conditional approval in July to sell a modified AI chip, the H20, to China. Licenses enabling those sales were issued only after Chief Executive Jensen Huang met with President Trump at the White House and agreed to the revenue-sharing structure. According to industry estimates, the agreement could send more than $2 billion to the federal government by year-end, with Nvidia projected to sell over $15 billion worth of the H20 chip in China and AMD expected to add roughly $800 million through sales of its MI308 chip.
This marks a notable departure from standard U.S. export control practices, in which revenue-sharing arrangements are virtually unheard of. The Commerce Department’s decision to link export licenses with a financial contribution aligns with the administration’s increasingly interventionist approach to international business. Similar patterns have emerged in other sectors, such as the recent approval of Nippon Steel’s investment in U.S. Steel, which included a rare golden share for the government.
The administration has simultaneously employed tariffs as leverage to drive manufacturing back to the United States. President Trump recently announced a 100 percent tariff on foreign-made semiconductors unless companies commit to domestic production. The AI chip agreement reflects this broader strategy of using market access as a bargaining chip in global trade negotiations.
The policy shift is not without controversy. The Trump administration had previously banned sales of these AI chips to China in April, citing national security risks and the potential for the technology to accelerate Beijing’s AI development. The reversal is seen by some analysts as a concession that could help Chinese companies close the technological gap with U.S. industry leaders. Nvidia’s chips, in particular, are widely considered superior to those produced by domestic Chinese competitors such as Huawei.
Officials have stressed that China will remain barred from purchasing Nvidia’s most advanced chips. Commerce Secretary Howard Lutnick has described the goal as keeping the United States “one step ahead” by limiting China’s access to only less powerful versions. For Nvidia and AMD, the deal ensures continued access to a lucrative market while enabling reinvestment into research and development. For the U.S. government, it represents a significant and unprecedented new revenue stream from high-tech exports.
The agreement highlights the evolving intersection of technology policy, trade strategy, and national security. It also sets a precedent for how Washington might structure future export control negotiations in other strategic industries, particularly as global competition over advanced computing intensifies.