NVIDIA and AMD chip sales in China have taken a dramatic turn as both companies agreed to pay 15% of their revenues from Chinese AI chip sales to the US government in exchange for export licenses. This unprecedented arrangement marks a significant shift in how American semiconductor companies operate in the Chinese market.
The landmark deal affects two key products: NVIDIA’s H20 AI accelerator and AMD’s MI308 chips, with both companies receiving export licenses to continue sales in China under this new revenue-sharing model. NVIDIA CEO Jensen Huang met with Trump last week to finalize these arrangements, according to Financial Times reports.
Revenue-Sharing Agreement Creates New Business Model
This unusual arrangement between the chip giants and the Trump administration represents an entirely new approach to managing technology exports to China. The 15% revenue share applies specifically to AI chip sales in the Chinese market, creating a direct financial link between private company profits and US government revenue.
The timing coincides with ongoing tensions over semiconductor technology transfer and national security concerns. Both companies had previously faced export restrictions that limited their ability to sell advanced AI chips to Chinese customers.
Strong Financial Performance Despite Regulatory Challenges
AMD recently reported record Q2 2025 revenue of $7.7 billion, with net income reaching $872 million despite facing $800 million in charges related to China export restrictions. The company’s strong performance demonstrates resilience amid regulatory uncertainty.
Gaming revenue surged 73% year over year to $1.1 billion, driven by increased demand for custom chips for game consoles and gaming GPUs. This growth exceeded analyst estimates significantly, showing robust demand across multiple market segments.
Key Points Summary
- 15% revenue share on Chinese AI chip sales
- Export licenses secured for H20 and MI308 products
- Direct government revenue participation in private sales
🔸 Financial Impact
- AMD posted $7.7 billion Q2 revenue despite $800M China-related charges
- Gaming segment grew 73% year-over-year
- Companies maintain profitability under new arrangement
🔸 Market Implications
- New precedent for US-China tech trade
- Continued access to Chinese markets under modified terms
- Government involvement in private sector revenue streams
Industry Implications and Future Outlook
This revenue-sharing model could establish a template for other technology companies seeking to maintain access to restricted markets. The arrangement allows both NVIDIA and AMD to continue competing in China’s lucrative AI chip market while addressing US government concerns about technology transfer.
For the current quarter, AMD expects sales of $8.7 billion, plus or minus $300 million, indicating confidence in continued growth despite the new regulatory framework. The company’s outlook suggests that nvidia amd chip sales can remain strong even under these modified trading conditions.
The semiconductor industry watches closely as this arrangement could influence how other American technology companies structure their international operations. The precedent of direct government participation in private sector revenues marks a significant shift in trade policy implementation.
Companies in both nations must now navigate this new framework while maintaining competitive positions in global markets. The success of this model will likely determine whether similar arrangements expand to other sectors or geographic regions.
What are your thoughts on this new revenue-sharing approach to managing technology exports? Share your perspective on how this might reshape the semiconductor industry moving forward.