In a move that could reshape the economics of high-end chip exports, Nvidia and AMD will now divert 15 per cent of revenues from their most advanced AI products sold in China directly to the U.S. government. The arrangement, covering Nvidia’s H20 and AMD’s MI308 models, is a prerequisite for export licences and marks a sharp departure from standard trade policy. It follows the reversal of an earlier U.S. ban on the H20, signalling a strategic recalibration in Washington’s approach to balancing technological competitiveness with geopolitical caution.
The timing is significant. China accounts for roughly 13 per cent of Nvidia’s sales and nearly a quarter of AMD’s, making the market a critical revenue stream for both. For the companies, the decision to accept these terms is as much about safeguarding their foothold in one of the world’s largest semiconductor markets as it is about maintaining investor confidence in an increasingly regulated sector. For Washington, the payments are presented as a measured safeguard, yet the lack of clarity on how the funds will be used leaves questions about whether the initiative prioritises security, economic strategy, or political optics.
Industry observers are divided. Some view the levy as a pragmatic compromise, allowing technology to flow under controlled conditions while generating funds that could be reinvested in domestic innovation. Others argue it is inconsistent: if the chips are deemed a genuine national security risk, no financial arrangement should justify their export. This debate underscores a larger concern for global tech firms: whether policy decisions will be guided by coherent long-term strategy or shaped by short-term political calculations.
For the broader semiconductor ecosystem, the precedent is potentially far-reaching. Future export approvals may be influenced less by security assessments and more by financial concessions, creating uncertainty for businesses navigating cross-border technology flows. In an industry where product cycles are short and competition is fierce, such unpredictability could prompt companies to rethink supply chains, licensing models, and R&D investments, ensuring that compliance and competitiveness are balanced in equal measure.
