NVIDIA and AMD Strike Unprecedented 15 Percent China Chip Deal with US

NVIDIA and AMD have struck a deal unlike anything the tech world has seen before. In exchange for export licenses, both companies will pay the U.S. government 15% of their revenue from selling AI chips in China. This applies to NVIDIA’s H20 AI accelerator and AMD’s MI308 chips. The agreement followed a direct meeting between NVIDIA CEO Jensen Huang and President Trump. While the companies see it as a way to keep competing in China, critics call it a monetization of U.S. trade policy.

Tariffs Take Center Stage in U.S.–China Tech Tensions

Trump’s administration has leaned heavily on tariffs to pressure China and reshape trade flows. Earlier this year, Trump threatened a 100% tariff on imported chips unless companies built them in the U.S. Now, this 15% revenue-sharing deal adds another twist. Instead of blocking sales outright, the U.S. government is taking a cut. Supporters say it keeps U.S. companies in the Chinese market while boosting domestic revenue. Opponents warn it opens the door to dangerous compromises on national security.

Revenue Sharing Replaces Traditional Tariffs

The 15% deal works like a tariff but targets company earnings instead of imports. It turns the U.S. government into a direct beneficiary of tech sales to China. No other American company has ever been asked to pay a portion of its revenues to secure an export license. Some trade experts see it as creative policy; others see it as a dangerous precedent. The move comes after months of uncertainty over export controls, with licenses for the H20 and MI308 chips only arriving after high-level White House talks.

National Security vs. Market Access

Security experts in Washington are sounding alarms over the arrangement. They warn that NVIDIA’s H20 could accelerate China’s AI capabilities, including military applications. A group of 20 former officials even wrote to the Commerce Department urging it to block the licenses. NVIDIA denies the chip poses a military risk, arguing the export rules already limit its capabilities. But the reversal of earlier bans—especially after direct talks with Trump—has fueled speculation that trade concessions may be overriding security concerns.

Tariffs, Soybeans, and the Bigger Trade Picture

This chip deal is unfolding as U.S.–China trade talks intensify. Trump has pressed Beijing to quadruple soybean purchases ahead of a key August deadline. If no extension is agreed upon, higher tariffs on Chinese goods will snap back into place. At the same time, the Commerce Department has been told to freeze new export controls to avoid angering China. For both tech and agriculture, the message from Washington is clear: tariffs and revenue-sharing are now tools in a wider strategy to balance economic gain, political leverage, and national security.

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