U.S. Government to Take Cut of Nvidia and AMD A.I. Chip Sales to China

U.S. Government Secures 15% Cut from Nvidia and AMD A.I. Chip Sales to China

What’s Happening?

In a controversial move, the U.S. government has struck an unprecedented deal with Nvidia and AMD, requiring the tech giants to hand over 15% of their AI chip sales revenue in China. This unprecedented arrangement, negotiated during President Trump’s administration, has sparked fierce debate among national security experts. Critics fear the deal could backfire, potentially accelerating China’s AI advancements while raising ethical concerns about governmental interference in private enterprise.

What’s Happening?

Nvidia and AMD have agreed to license A.I. chip sales to China under a deal requiring them to cede 15% of earnings to the U.S. government. This unprecedented arrangement, facilitated by Trump, has triggered significant backlash from national security experts.

Where Is It Happening?

The agreement impacts global semiconductor industries, with the primary focus on AI chip sales in China and compliance overseen by U.S. regulatory bodies.

When Did It Take Place?

The deal was negotiated during the Trump administration, with the specifics of the arrangement recently coming to light in 2024.

How Is It Unfolding?

• The arrangement mandates Nvidia and AMD to transfer 15% of their AI chip sales revenue in China to the U.S. government.
• National security experts argue the deal sets a dangerous precedent, potentially benefiting China’s AI advancements unintentionally.
• Critics question the long-term implications for U.S.-China tech relations and worry about government overreach.
• The U.S. government defends the deal as a strategic move to mitigate risks associated with AI chip exports.
• Both companies are navigating compliance complexities, as the agreement raises legal and ethical concerns.

Quick Breakdown

• 15% of Nvidia and AMD’s AI chip sales revenue in China will go to the U.S. government.
• The deal was negotiated under President Trump’s administration and remains contentious.
• Critics argue it could inadvertently accelerate China’s AI capabilities.
• Experts are split on the geopolitical and financial implications of the arrangement.

Key Takeaways

This deal marks a rare instance of the U.S. government directly benefiting from private-sector exports, particularly in the technology sector. While advocates argue it strengthens control over AI chip exports, critics warn it sets a troubling precedent. The arrangement highlights the delicate balance between national security, corporate interests, and international trade. Ultimately, the deal underscores the growing tension between economic gains and geopolitical risks.

The longer-term implications of this deal could see China double down on self-sufficiency, leaving the U.S. with less influence over AI technology. It’s a high-stakes gamble with unpredictable consequences.

– Sarah Lee, Tech Policy Analyst

Final Thought

This controversial deal between Nvidia, AMD, and the U.S. government underscores the complex interplay between technology, economics, and national security. While it may provide short-term financial benefits, the risks could outweigh the rewards. The arrangement raises serious questions about government intervention in private business and the potential unintended consequences for global tech competition.

Source & Credit: https://www.nytimes.com/2025/08/10/technology/us-government-nvidia-amd-chips-china.html