{"id":162059,"date":"2025-08-11T07:58:49","date_gmt":"2025-08-11T07:58:49","guid":{"rendered":"https:\/\/teknomers.com\/en\/nvidia-and-amd-are-allowed-to-sell-their-ai-chips-to-china-interestingly-they-will-give-the-u-s-a-15-share-of-the-profits-from-these-sales\/"},"modified":"2025-08-11T07:58:51","modified_gmt":"2025-08-11T07:58:51","slug":"nvidia-and-amd-are-allowed-to-sell-their-ai-chips-to-china-interestingly-they-will-give-the-u-s-a-15-share-of-the-profits-from-these-sales","status":"publish","type":"post","link":"https:\/\/teknomers.com\/en\/nvidia-and-amd-are-allowed-to-sell-their-ai-chips-to-china-interestingly-they-will-give-the-u-s-a-15-share-of-the-profits-from-these-sales\/","title":{"rendered":"Nvidia and AMD are allowed to sell their AI chips to China. Interestingly, they will give the U.S. a 15% share of the profits from these sales."},"content":{"rendered":"\n
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Nvidia and AMD Navigate US-China Trade Dynamics<\/h2>\n

Nvidia<\/strong> and AMD<\/strong> have reached an agreement with the United States government to share a portion of their revenue from the sale of specific AI chips in China. This unprecedented pact allows for the export of these crucial components to the Asian market after a prolonged period of ambiguity, but it comes with a noteworthy stipulation\u2014the US government will receive a 15% cut from the profits.<\/p>\n

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The Context of the Trade Issues<\/h2>\n

Over the past several years, the US government has imposed various restrictions on advanced technologies, specifically aimed at restricting China’s ability to compete globally. The repercussions of these sanctions have become increasingly evident. Despite these efforts, China’s advancements in AI, exemplified by models like Deepseak<\/strong> and chips produced by firms like Huawei<\/strong>, indicate that the US strategy to curb Chinese technological progress has not been entirely successful.<\/p>\n

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Nvidia’s H20 Chips: A Bid to Comply<\/h2>\n

In a bid to circumvent US restrictions, Nvidia developed its H20 chip<\/strong>, specifically designed to comply with the US government’s regulations while continuing to generate revenue in China. Despite these efforts, the US government ultimately prohibited the sale of the H20 chip in the Asian powerhouse, leaving Nvidia in a precarious position.<\/p>\n

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AMD Faces Similar Challenges<\/h2>\n

The US government has found itself in a challenging predicament: to either sell AI hardware to China or withhold it and allow Chinese companies to develop their own technologies. AMD<\/strong> shares a similar plight, facing significant barriers in selling its AI chips to China, which has implications for their global revenue, heavily reliant on the Chinese market.<\/p>\n

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The Financial Agreement as a Solution<\/h2>\n

The breakthrough in this ongoing dilemma came down to finances. The recent agreement, as reported by Financial Times<\/a>, will permit Nvidia and AMD to export their chips to China, with the stipulation that 15% of the revenue from these sales must be paid to the US government.<\/p>\n

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Jensen Huang’s Warning<\/h2>\n

Nvidia’s CEO, Jensen Huang<\/strong>, previously cautioned that the restriction on chip sales in China could lead to a staggering $15 billion drop in revenue this fiscal year. The Chinese market accounts for approximately 13% of Nvidia’s total earnings, and the sanctions posed a serious risk not only to Nvidia but also to AMD in maintaining their foothold in this lucrative market.<\/p>\n

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A Productive Meeting<\/h2>\n

According to reports from FT, the US Department of Commerce began issuing export licenses for the H20 chips just two days after Huang met with US President Donald Trump. This meeting appears to have been a critical moment that paved the way for the agreement between the companies and the government.<\/p>\n

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A Unique Precedent<\/h2>\n

This type of “quid pro quo” arrangement is unprecedented, as noted by analysts from FT. No US company has previously agreed to share their income in exchange for export licenses. Nonetheless, the terms align with President Trump’s broader doctrine of imposing reciprocal tariffs and demanding that companies produce essential components domestically instead of relying on imports.<\/p>\n

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Future Projections<\/h2>\n

According to analysts at Bernstein, Nvidia could have sold approximately 1.5 million H20 chips in China without the export restrictions, translating to estimated revenues around $23 billion. However, that figure has now likely diminished. Despite this, it is anticipated that Chinese enterprises will place significant orders for both Nvidia and AMD chips moving forward.<\/p>\n

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Concern Over Precedents<\/h2>\n

Experts have raised alarm over the implications of such agreements. Liza Tobin from the Jamestown Foundation expressed concern about the potential normalization of trade issues where exporting licensing becomes a source of income for the US government. She provocatively questioned whether this could lead to further selling of military technology, such as F-35 jets, to China under similar terms.<\/p>\n

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As the landscape of international trade continues to evolve, the agreement between Nvidia and AMD with the US government highlights the complex interplay of technology, finance, and geopolitics. With China’s ambitions to become a leading force in artificial intelligence, both the rationale and repercussions of such dealings will likely shape the future of US-China relations and the global tech industry.<\/p>\n<\/div>\n


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General News – 2<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Nvidia and AMD Navigate US-China Trade Dynamics Nvidia and AMD have reached an agreement with the United States government to share a portion of their revenue from the sale of specific AI chips in China. This unprecedented pact allows for the export of these crucial components to the Asian market after a prolonged period of […]<\/p>\n","protected":false},"author":1,"featured_media":162060,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36399],"tags":[1253,37174,2397,10052,1446,40263,20230,6211,3709,2473,1178,24396],"class_list":["post-162059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-allowed","tag-amd","tag-china","tag-chips","tag-give","tag-interestingly","tag-nvidia","tag-profits","tag-sales","tag-sell","tag-share","tag-u-s"],"_links":{"self":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/162059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/comments?post=162059"}],"version-history":[{"count":0,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/posts\/162059\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media\/162060"}],"wp:attachment":[{"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/media?parent=162059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/categories?post=162059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/teknomers.com\/en\/wp-json\/wp\/v2\/tags?post=162059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}