Chip Industry Giants Nvidia and AMD Set to Remit 15% of China Sales to US Government

In a strategic move, major semiconductor manufacturers Nvidia and AMD have consented to pay 15% of their revenues from China sales to the US government as part of an arrangement to secure necessary export licenses. A source informed the BBC of this development, marking a significant shift in the trade dynamics between the US and China. Nvidia confirmed the adjustment while detailing their commitment to adhere to US regulations concerning international market participation. Meanwhile, the agreement will require Nvidia to allocate 15% of its earnings from H20 chip sales and AMD to contribute a similar share from its MI308 chip revenues.

Nvidia's recent dealings come after earlier restrictions were placed on their H20 chips due to security concerns raised in 2023. However, discussions revolving around chip sales have recently seen a thaw amidst gradually easing trade tensions between the two global powers. Notably, Nvidia's CEO Jensen Huang was involved in significant lobbying efforts which led to his meeting with President Donald Trump regarding the resumption of chip sales. The easing of tensions has also seen China relax restrictions on rare earth exports and the US lifting certain restrictions on chip design software companies in China. While prospects of a continued truce in tariff disputes appear to be on the table, formal confirmation remains pending with an imminent deadline ahead.