Nvidia, AMD Agree to Hand Over 15% of Chip Revenue to US Authorities

Nvidia and AMD’s 15% Revenue-Sharing Deal with U.S. Government Could Reshape Global Tech Trade

In a move that could redefine the way technology companies navigate international trade restrictions, U.S. chipmaking giants Nvidia and AMD have reportedly agreed to give the U.S. government 15% of revenues from certain semiconductor sales to China. The arrangement, first reported by the Financial Times, comes in exchange for export licenses to sell specific high-performance chips in the Chinese market.

Source: Financial Times

This unprecedented revenue-sharing deal has sparked speculation among analysts, policymakers, and industry leaders about whether it represents a new trade negotiation strategy — and whether it could ignite fresh tensions in the global technology supply chain.

Bypassing Tariffs or Innovating Trade?

The agreement centers on two chips: Nvidia’s H20 and AMD’s MI308, both designed for artificial intelligence workloads and tailored to meet U.S. export regulations for China. In return for the 15% revenue allocation, the companies are expected to secure U.S. government approval to resume shipments of these chips to Chinese clients.

Source: X

The development follows a series of escalating trade measures. Former President Donald Trump, in recent remarks, warned that he would implement a 100% tariff on imported semiconductors and chips unless companies committed to manufacturing in the United States. Such tariffs, if enforced, could significantly raise costs for foreign-made technology and disrupt global supply chains.

By offering a share of revenues instead of paying import tariffs, Nvidia and AMD may have found a novel — and controversial — path to continue accessing one of their largest overseas markets.

High-Level Meetings and Policy Shifts

The negotiations leading to the deal reportedly involved direct engagement between Nvidia CEO Jensen Huang and the Trump administration. Huang met with Trump at the White House last week, where, according to the Financial Times, discussions focused on maintaining U.S. competitiveness in AI chip production while ensuring national security concerns were addressed.

In April, the U.S. government banned exports of Nvidia’s H20 chips to China over fears they could enhance the country’s AI capabilities in ways that might challenge U.S. defense and technology interests. However, following the White House meeting in June, Trump reversed the ban in principle — though export licenses remained pending until this revenue-sharing arrangement emerged.

Nvidia and AMD have declined to disclose the specific terms of the deal but emphasized compliance with U.S. trade rules. “We follow the rules the U.S. government sets for our participation in worldwide markets,” Nvidia said in a statement.

A New Trade War Playbook?

The 15% revenue-share agreement has raised questions about whether the U.S. government is experimenting with alternative trade enforcement methods. Instead of blanket tariffs, this model allows companies to operate in restricted markets while directly contributing to U.S. government revenue.

Industry analysts have pointed out that this approach could set a precedent for future U.S.–China tech relations. If a foreign nation cannot meet U.S. tariff requirements, a revenue-sharing deal could become a preferred alternative. This would not only bypass tariff costs but also create a steady income stream for the U.S. government.

“The trade war appears to be entering a new phase,” wrote The Kobeissi Letter, a global markets newsletter. “We may be witnessing the birth of a revenue-sharing mechanism as a replacement for traditional tariffs in certain industries.”

Ripple Effects Across the Tech Industry

The announcement has already influenced other technology firms. Bitmain, a leading cryptocurrency mining hardware manufacturer, has reportedly begun exploring new production facilities in Texas and Florida to avoid potential tariff impacts. Establishing operations in the United States would allow companies to bypass tariff rules entirely, potentially boosting domestic manufacturing and creating new jobs.

For the U.S. economy, the shift could mean an influx of high-tech manufacturing jobs and infrastructure investment — outcomes that have been at the center of political debates about trade policy for years.

Impact on the AI and Crypto Sectors

Beyond geopolitics, the Nvidia and AMD agreement could also affect the cryptocurrency and blockchain sectors. The high-performance chips in question are not only essential for artificial intelligence but are also used in certain blockchain applications, particularly in the areas of crypto mining and AI-driven decentralized platforms.

As Bitcoin recently surged past $119,000 and the global cryptocurrency market cap neared $4 trillion, analysts say the availability of advanced chips could accelerate innovation in crypto-related AI tools, transaction processing, and blockchain scalability.

Source: Yahoo Finance

“The deal could indirectly fast-track AI-powered blockchain solutions into mainstream finance,” said one industry observer. “If companies like Nvidia and AMD can maintain stable supply lines into China, it may lead to a surge in hardware availability, which benefits AI and crypto developers worldwide.”

Wall Street’s Reaction

The financial markets appear to have responded positively to the news. Nvidia’s stock closed at $182.74 on August 8, up 1% for the day, and reaching a record high of $183 earlier in the week. AMD’s shares also saw modest gains.

Investors may be betting that this revenue-sharing model will allow U.S. chipmakers to retain access to the massive Chinese market while keeping regulators satisfied — a balance that could sustain earnings growth despite ongoing geopolitical frictions.

Challenges and Criticism

Not everyone is celebrating. Critics argue that the revenue-sharing deal effectively allows companies to “buy their way” past national security restrictions, potentially undermining the purpose of export controls. Others worry that such agreements could create unequal competition, as smaller companies might not have the financial flexibility to offer similar revenue concessions.

There is also uncertainty over how China will view the arrangement. While the deal enables the import of restricted chips, it also channels a portion of Chinese tech spending directly into the U.S. government’s coffers — a dynamic that could become politically sensitive in Beijing.

A Precedent for the Future?

Whether the Nvidia–AMD deal becomes a one-off exception or a template for future trade negotiations remains to be seen. The U.S. has long relied on tariffs, quotas, and outright bans to regulate sensitive technology exports. A revenue-sharing approach could provide more flexibility but may also require careful oversight to prevent exploitation.

For now, the deal underscores the delicate balance between economic opportunity, technological leadership, and national security in the global tech race. As AI, blockchain, and semiconductor technologies converge, the rules of trade are likely to evolve — and the Nvidia–AMD agreement may be the first sign of what’s to come.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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