Nvidia and AMD can sell AI chips to China again under a first-of-its-kind export deal
I-Hwa Cheng/Bloomberg via Getty Images
Nvidia $NVDA and AMD $AMD are reentering China’s AI-chip market — by writing checks to the U.S. Treasury. To resume selling AI-capable chips such as the H20 and MI308, which were caught in Washington’s tightening net of semiconductor restrictions earlier this year, the two companies have reportedly agreed to hand over 15% of their China revenue to the U.S. government in exchange for export licenses.
The news is an export-policy twist that nobody saw coming: an arrangement that doesn’t come with new specs or a quota but instead comes with a price tag that could add up to billions in revenue for the government.
The deal was first reported by The Financial Times, and U.S. officials confirmed the news to Reuters. They haven’t said whether the 15% cut will be skimmed off at the point of sale or collected later, or where it will be allocated once it lands in the Treasury Department’s coffers.
For both companies, the deal comes because China is simply too important to write off. Last year, Nvidia booked roughly $17 billion from the market — about 13% of its total revenue. AMD leaned in even harder, pulling in $6.2 billion, nearly a quarter of its sales. But the export ban imposed by the Trump administration in April put both companies on the defensive, with Nvidia taking a $5.5 billion write-down on stranded H20 inventory and warning of billions in lost sales. AMD flagged $800 million in inventory-related charges and projected a $1.5 billion revenue hit for the year, with gross margins taking as much as an 11-point knock.
Those hits showed up fast in the quarterly numbers. AMD’s second-quarter revenue jumped 32% year-over-year to $7.7 billion, but the lift came from gaming and PC chips. The data-center unit — home to its AI lineup — grew 14% to $3.2 billion, but performance was blunted by the MI308 ban. Gross margin fell to 43%. Nvidia hasn’t yet reported a full quarter under the new restrictions, but a similar hit is expected, even as the company continues to outperform expectations.
A rule shift this summer changed everything. In July, the Commerce Department began issuing licenses for the H20 — clearance that arrived after Nvidia CEO Jensen Huang met with President Donald Trump in Washington. AMD followed close behind with a license for its MI308. The new licenses don’t restore pre-ban margins — every $1 billion in China chip sales now means $150 million off the top for Nvidia and AMD — but they replace a total freeze with a steady, if slimmer, stream.
Behind the scenes, the Commerce Department is grappling with its worst export‑license backlog in over 30 years, delaying approvals and raising risks for U.S. exporters.
The move is unusual in the history of U.S. export controls, which have typically been blunt instruments — either an outright ban or a technical downgrade to meet performance caps. This is the first time Washington has publicly tied access to a direct revenue share, a model that could be replicated in other sectors where the U.S. controls choke-point technology.
Chinese state media have already reacted with suspicion. Doubts about the H20’s safety, environmental standards, and alleged backdoor capabilities have been amplified following the deal with the U.S. government, which Nvidia has denied. Right now, the company is working on China-specific chip variants, including a downgraded H20 with lower memory capacity for export compliance, and it's exploring a Blackwell-based GPU for China that is expected to arrive later. Huang, however, has said that he wants to ship more advanced chips to Beijing. AMD, meanwhile, has been more tight-lipped about any China-only product plans.
For now, Nvidia and AMD are making the same calculation that it’s better to take a 15% haircut on billions in sales than to hand the entire market to any foreign rivals. Whether business deals like this one become a one-off fix or a fixture in U.S. trade policy, the message is blunt: If Washington controls the gate, it can charge admission — and the world’s most valuable chipmakers will pay to get through.
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