US Forces Nvidia and AMD to Surrender 15% of China Revenue: A Major Shift in Tech Industry Dynamics

In a significant development in the semiconductor industry, US authorities have mandated that leading chip manufacturers, Nvidia and AMD, must contribute 15% of their sales revenue from the Chinese market. This requirement is part of the conditions necessary for securing export licenses to operate in one of the world’s largest economies. This move highlights the ongoing complexities in US-China trade relations and the increasing pressures on the technology sector.

According to a source cited by the BBC, both Nvidia and AMD have agreed to pay this percentage of their semiconductor revenues derived from sales in China. The stipulation is aimed at facilitating their compliance with US export regulations while still enabling them to engage in the lucrative Chinese market. Here are some key points regarding this arrangement:

• Nvidia’s Compliance: Nvidia has publicly stated its commitment to adhering to US government regulations, emphasizing that it aims to maintain a competitive edge in the Chinese market despite these challenges.
• AMD’s Position: Unlike Nvidia, AMD has not released a public statement regarding this particular agreement, leaving some details about their strategy unclear.
• Specifics of Revenue Sharing: Under the terms of the agreement, Nvidia will pay 15% of its revenue from H20 chip sales in China, while AMD will do the same for its MI308 chip sales. These specific revenue-sharing terms were first reported by the Financial Times.
• Expert Commentary: Charlie Dai, vice president at Forrester, referred to this arrangement as “unprecedented,” highlighting how high the costs of market access have become amid escalating technology trade tensions.
• Security Concerns: The US government previously prohibited the sale of Nvidia’s H20 chips to China due to “security concerns,” although some restrictions have been partially lifted recently.
• Criticism of Policy: Critics have raised concerns about the US government’s contradictory stance on national security, allowing for chip sales in exchange for payments to the Treasury.
• Historical Context: The H20 chips were specifically designed for China following the Biden administration’s imposition of export restrictions in 2023, with sales being completely halted by the Trump administration in April 2025.
• Lobbying Efforts: Nvidia’s CEO, Jensen Huang, has been actively lobbying for the resumption of sales to China, reportedly holding meetings with President Trump recently.
• Current Trade Climate: The revival of chip exports comes during a period of temporary easing in US-China trade tensions, with both countries recently agreeing to a 90-day tariff truce.
• Future Negotiations: China has called on the US to relax semiconductor export controls as part of any future tariff agreement, indicating ongoing negotiations between the two nations.
• Domestic Investment Push: Trump’s broader trade strategy has encouraged US corporations to increase their domestic investments, with companies like Apple and Micron announcing significant investments in the United States.
• Nvidia’s Ambitious Plans: Nvidia has set forth a $500 billion plan aimed at building AI servers and supercomputers entirely within the United States, showcasing its commitment to domestic innovation.

The dynamics within the semiconductor industry continue to evolve, influenced by both regulatory changes and international trade relations. The requirement for Nvidia and AMD to share a portion of their revenues from China marks a new chapter in how US firms navigate the complexities of the global market. As these companies adapt to the changing landscape, their strategies will likely play a critical role in shaping the future of semiconductor technology and international trade.

As the situation unfolds, stakeholders in the technology sector will be closely monitoring the implications of these agreements on market dynamics, particularly how they affect competition and innovation in both the US and China. The interplay of government regulations and corporate strategies will undoubtedly influence the trajectory of the semiconductor industry in the years to come.