Can the United States cut off China’s supply of computer chips, thereby obstructing its rapid technological advancement? It’s a multi-billion-dollar question everyone has their eyes on. White House policy is set to skim 15% off high-end chip sales for American tech giants NVIDIA and AMD in the crucial Chinese market.
This unusual deal specifically applies to NVIDIA’s H20 GPU and AMD’s MI308 chip—both tailored for AI applications. The revenue-sharing agreement came after the Trump administration banned advanced semiconductor sales to China in April 2025 over national security concerns. These restrictions had effectively blocked NVIDIA and AMD from accessing one of their most lucrative market, i.e. China.
Later, both the tech giants agreed to pay the U.S. government 15% of their revenues from artificial intelligence chip sales to China in exchange for export licenses, confirmed by President Donald Trump during a Monday briefing. The financial consequences for AMD and NVIDIA are immediate. China is a primary market, and analysts project the restrictions could slash over $400 million in potential quarterly sales for NVIDIA alone.
Chairman @RepMoolenaar’s statement on the Nvidia and AMD deals: pic.twitter.com/K8ElSfZM6z
— Select Committee on the Chinese Communist Party (@committeeonccp) August 12, 2025
There is currently political opposition to the plan to permit the sale of weaker chips under license. Reports suggest that the U.S. government may collect a fee or a “cut of the proceeds” from these licensed sales in China have alarmed Congressman John Moolenaar, the chairman of the House Select Committee on the CCP. Moolenaar recently questioned whether such a move is legal and cautioned that it would create a bizarre incentive. His concern is that a focus on revenue could compromise the primary national security goal of the policy.
If this agreement is successful, it may serve as a model for future technology trade between the United States and China. A similar revenue-sharing model might apply to other US tech firms in delicate industries in order to gain access to the Chinese market.
Even though the deal results in lower profit margins on Chinese sales, it gives NVIDIA and AMD shareholders access to the market. Now, as they have obtained regulatory approval for their important AI products, the companies can more confidently plan their strategies.
Since this instance marks a significant shift from conventional export control mechanisms that primarily depend on security considerations to a hybrid model that includes direct financial incentives for the U.S. government, its long-term effects are still unknown.
