News
Nvidia, AMD agree to pay 15% of China chip sales to U.S. government
Nvidia and AMD Strike Unusual Deal with U.S. Over China Chip Sales
What’s Happening?
In a groundbreaking move, U.S. chip giants Nvidia and AMD have agreed to hand over 15% of their China chip sales revenue to the U.S. government. This unique arrangement marks a shift in how tech export controls are managed, focusing on revenue-sharing rather than traditional national security concerns.
Where Is It Happening?
This deal impacts global tech trade, particularly between the U.S. and China, where both Nvidia and AMD have significant business operations. The agreement will likely influence future export policies and international tech relations.
When Did It Take Place?
The terms of the agreement were finalized recently, though the exact timing remains undisclosed. The deal applies to upcoming export licenses for China, indicating an immediate impact on current and future business transactions.
How Is It Unfolding?
- The companies must remit 15% of their revenue from chip sales in China to the U.S. government.
- This arrangement is a prerequisite for securing export licenses to continue operations in China.
- No previous policy used revenue-sharing as a condition for export approvals.
- Raised a debate about international equity and potential repercussions for U.S.-China trade relations.
- Tech analysts are closely watching its legal and economic ramifications.
Quick Breakdown
- Pioneering revenue-sharing model: 15% for U.S. government.
- Means to secure export licenses for China operations.
- Ignores traditional national security basis for tech controls.
- Raises questions about trade fairness and broader implications.
Key Takeaways
This agreement disrupts conventional tech trade policies by introducing a revenue-based condition for export licenses. While it could boost U.S. funding for strategic initiatives, it also risks straining relations with China, a crucial marketplace for global tech firms. Critics argue it sets a problematic precedent, potentially marking the start of a broader shift in international trade regulations.
Imagine a world where every dollar earned overseas comes with a prepaid tax—this is what Nvidia and AMD are facing.
This deal is a double-edged sword: it opens doors for companies but risks setting a precedent that could result in retaliatory measures from other nations.
– Jane Jenkins, Tech Policy Analyst
Final Thought
The Nvidia and AMD agreement marks a pivotal moment in tech policy. While it could strengthen U.S. oversight and revenue streams, it raises alarms about global trade fairness. If other nations follow suit, this could escalate tensions and handcuff innovation. Companies navigating this landscape must adapt or face exclusion from one of the world’s largest markets.
Source & Credit: https://www.washingtonpost.com/technology/2025/08/10/nvidia-amd-china-chips-deal-trump/
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