The United States government is facing backlash for striking a deal that allows Nvidia and AMD to resume sales of certain advanced AI chips to China — in exchange for 15 percent of revenue from those sales. Critics say the arrangement undermines Washington’s own national security policy and turns export controls into a cash-generating tool.
According to a U.S. official, Nvidia and AMD agreed to the revenue-sharing condition in order to secure export licenses for semiconductors like Nvidia’s H20 and AMD’s MI308, which had been previously barred from sale to China. The ban, implemented in April under the Trump administration, was framed as a safeguard against technology transfers that could aid China’s AI and military capabilities, Reuters news report said.
China’s AI chips market revenue will reach $8.17 billion in 2025, with a CAGR of 30.7 percent, growing to $31.16 billion by 2030, according to a report in Statista. Reuters report is silent about the size of AI chips sales for Nvidia and AMD from China.
Nvidia generated $17 billion from China in fiscal 2025 — 13 percent of its total revenue. AMD earned $6.2 billion from the China semiconductor market in 2024, accounting for 24 percent of its sales. Both companies stand to benefit from the reinstated access, albeit with a sizable slice going to the U.S. Treasury.
The policy reversal has raised eyebrows. “Either selling H20 chips to China is a national security risk, in which case we shouldn’t be doing it, or it’s not, in which case, why are we putting this extra penalty on the sale?” said Geoff Gertz, senior fellow at the Center for New American Security.
Alasdair Phillips-Robins, a former adviser at the Commerce Department during the Biden administration, was more blunt: “If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury.”
U.S. Commerce Secretary Howard Lutnick defended the move, describing the H20 as Nvidia’s “fourth-best chip” and arguing that it was in America’s interest for Chinese companies to remain reliant on U.S. technology, even if the most advanced products remained off-limits.
However, the arrangement has fueled criticism that Washington’s tech policy is less about protecting innovation and more about monetizing restrictions. For China, the agreement restores access to valuable AI hardware; for Nvidia and AMD, it reopens a lucrative market.
TelecomLead.com News Desk