US Influence Leads to Economic Investments from Japan, EU, and China
In a groundbreaking development, tech giants Nvidia and AMD have entered into a revenue-sharing agreement with the U.S. government as a condition for obtaining export licenses to sell certain artificial intelligence (AI) chips to China.
According to the agreement, both companies will pay 15% of their revenue from AI chip sales in China to the U.S. Commerce Department. This arrangement is unique as export licenses typically do not require companies to share a percentage of sales revenue with the government.
The deal, negotiated in early August 2025, allows Nvidia to sell its AI chip named H20 to Chinese customers, while AMD received an export license for its AI chip called MI308. Notably, Nvidia CEO Jensen Huang met with then-President Trump, who initially sought a 20% cut, but agreed to 15% after negotiation.
The purpose behind the U.S. government's controls includes restricting China’s access to advanced semiconductor technologies critical for manufacturing next-generation integrated circuits and military applications. Nvidia has emphasised that they are complying with U.S. export control rules and have not shipped the H20 chip to China for months, but hope to compete in that market within these guidelines.
This new model of government-industry cooperation, involving direct revenue sharing tied to export licenses, might serve as a prototype for future deals in other sectors.
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[1] Source: TechCrunch, August 10, 2025 [2] Source: Reuters, August 11, 2025 [3] Source: CNBC, August 12, 2025
Nvidia and AMD, as part of their revenue-sharing agreement with the U.S. government, will pay 15% of their revenue from AI chip sales in China to the U.S. Commerce Department, a departure from typical export license conditions that do not involve sharing sales revenue with the government. This unique arrangement could potentially serve as a prototype for future deals in other sectors, signifying a new model of government-industry cooperation.
