Nvidia and AMD Could Supply Premium AI Chips to China If They Share Profits with the U.S.

The discussion surrounding the AI chip competition has shifted from U.S. national security to tariffs. Reports suggest that Nvidia and AMD have agreed to pay the U.S. government 15% of their revenue from high-end AI chip sales to China in return for licenses to sell these chips there, according to a Financial Times article referencing anonymous sources.

According to the FT’s governmental source, Nvidia will allocate revenue from its H20 AI chip sales in China, while AMD will contribute a portion of its MI308 chip sales. The report indicates that the U.S. government has started granting licenses for these companies’ chip sales.

Back in April, the Trump administration imposed restrictions on the sale of certain high-performance AI inference chips to China but lifted the ban a few months later after Nvidia promised to invest up to $500 billion in U.S. data centers. However, in July, Nvidia announced it would restart sales of its H20 AI chips to China, which were tailored for that market following restrictions from the Biden administration.

“We comply with the rules established by the U.S. government for our engagement in international markets,” an Nvidia spokesperson said in an email. “Although we haven’t shipped H20 to China for several months, we aspire that export control regulations will allow America to compete in both China and globally.”

U.S. Commerce Secretary Howard Lutnick mentioned that Nvidia’s shift was tied to trade discussions with China regarding rare-earth elements, crucial for manufacturing components like rechargeable batteries for electric vehicles.

The administration’s decision to allow the sale of Nvidia’s H20 chips has drawn criticism: national security experts and former officials reached out to Lutnick last month, urging a re-evaluation of the decision.

Note: This article was updated to include a statement from Nvidia.