President Trump Secures 15% Revenue Share from Nvidia’s Sales of AI-focused Chips in China

The U.S. administration has announced a unique revenue-sharing agreement with chipmaker Nvidia, requiring the tech giant to remit 15% of its earnings generated from sales of the H20 microchip in China. This chip is instrumental in the advancement of artificial intelligence technology.

During a White House press conference, President Trump disclosed that Nvidia’s CEO Jensen Huang had requested easement on export restrictions to facilitate sales of the H20 in China. In response, the President proposed a 20% levy, which was negotiated down to 15%.

Trump described the H20 as an “outdated” chip, suggesting that China already possesses similar technology under a different guise. To comply with export controls, Nvidia designed the H20 to be less powerful than its top-tier microchips.

The specific executive order authorizing this revenue-sharing agreement and whether it constitutes a tax remain unclear. In a statement, Nvidia affirmed compliance with U.S. government guidelines governing their global market participation. However, the spokesperson declined to elaborate further and did not confirm the reported 15% figure.

Reports in various media outlets, including the Financial Times, indicate that competitor Advanced Micro Devices (AMD) will also contribute 15% of its China-derived revenue from sales of the MI308 chip to the U.S. government. Trump did not mention AMD during the press conference, and AMD has yet to comment on the matter.

This revenue-sharing agreement represents the latest development in a prolonged dispute over exports of advanced microchips destined for artificial intelligence research in China. During his first term, President Trump imposed restrictions on high-end chip exports due to concerns about enhancing China’s technological edge and potential threats to U.S. national security. The Biden administration further tightened controls on chips and related equipment.

However, upon resuming office this spring, the export restrictions were eased to allow Nvidia to sell H20 chips in China, putting a halt to plans for additional restrictions. In July, AMD announced that the Commerce Department would review applications for the export of specific chips to China.

“While we haven’t shipped H20 to China for months, we hope export control rules will allow America to compete in China and globally,” Nvidia stated.

During the press conference, Trump hinted that Nvidia’s Blackwell chip, which he referred to as “super duper advanced,” may also be under consideration, albeit in a diminished form, and with a potential demand for a 30-50% share of sales revenue.

In July, Chinese regulators met with Nvidia representatives to discuss potential security risks associated with the H20, including possible “backdoors.” Nvidia reiterated its commitment to cybersecurity, maintaining that their chips are free of backdoors or means for remote access and control.