Aug. 12 (Bloomberg) - According to the Financial Times, in order to get thechipexport licenses.Nvidia,AMD reached an unusual arrangement with the Trump administration that includes paying 15% of its revenue from Chinese chip sales to the U.S. government.
The two chipmakers agreed to the financial arrangement in order to obtain export licenses for the Chinese market, according to a U.S. official and other people familiar with the matter.The licenses were approved last week.
The U.S. official said NVIDIA, AMD agreed to pay the U.S. government 15% of its revenue from the sale of H20 and MI308 chips in China. Two people familiar with the matter saidThe Trump administration has yet to decide how to use the funds.
The Financial Times reported on Friday that the U.S. Department of Commerce began issuing export licenses for the H20 chip on Friday, just two days after NVIDIA CEO Jensen Huang met with President Trump. The U.S. official said the U.S. government has also begun issuing export licenses for AMD for the Chinese market.
This quid pro quo is unprecedented.Export control experts say no U.S. company has ever agreed to turn over a portion of its revenue in order to obtain an export license. But the arrangement is consistent with the Trump administration's pattern.Trump would urge companies to take steps (e.g., investing domestically) to avoid tariffs as a way to attract jobs and income back to the U.S.
Bernstein analysts estimate that, based on NVIDIA's earnings guidance before export controls went into effect earlier this year, theThe company could have sold about 1.5 million H20 chips to China in 2025, generating about $23 billion in revenue.
In response, NVIDIA did not deny that it had agreed to the arrangement, stating, "We abide by the rules set by the U.S. government for our participation in the global marketplace."
Regarding the H20 export license, NVIDIA said on Saturday, "While we have not shipped H20 chips to China for several months, we hope that the export control rules will allow the U.S. to remain competitive in China and the global marketplace.The U.S. cannot afford to make the same mistake with 5G and lose leadership in telecommunications. If we can compete aggressively, the U.S. AI technology system can become the global standard.”
As of this writing, AMD has not commented on this.