Nvidia and AMD’s 15% Deal: Chips to China, Tip to the US!
From the winding alleys of Beijing to the power corridors of Washington, this week witnessed a surprising deal in the world of technology and politics. American chip giants Nvidia and AMD have agreed to give the US government 15% of the revenue from their chip sales in China.
It sounds unusual, doesn’t it? But this system might become the new reality — a direct play not just on technology but also on dollars.
How Did This Deal Come About?
The story has a cinematic touch.
A few months ago, the administration of President Donald Trump imposed strict restrictions on selling high-performance AI chips to China. The reason? The US feared that such powerful chips could be used in China’s military projects.
Meanwhile, Nvidia’s CEO Jensen Huang met with Trump. Just two days later, the plot took a twist — the government said, “Alright, you can sell… but with a new condition.”
The condition was — “You must give us 15% of whatever you sell in China.”
H20 and MI308: The Stars of the Deal
Nvidia developed a special H20 AI chip for China — one of America’s most powerful AI chips, but a “tuned-down” version to comply with Chinese export rules. On the other hand, AMD was preparing to sell its MI308 AI chip.
Now, both companies will sell these chips in China, but 15% of the profit will go straight into Washington’s treasury.
How Much Money Are We Talking About?
According to analysts, Nvidia could sell around 1.5 million H20 chips in China in 2025, generating approximately $2.3 billion in revenue. Now imagine, 15% of that means — around $345 million straight into the US government’s pocket!
AMD’s revenue figures are not yet public, but based on the H20 deal, the amount there will not be insignificant either.
The First Ever ‘Chip Commission’ in History
The US has never before adopted the method of taking a “share of revenue” in exchange for export licenses. It’s like saying — “Alright, you can sell our weapons, but give us a cut from every sale.”
Some experts are calling it ‘Quid Pro Quo 2.0’ — like in the movies, “I’ll help you, but there will be a price to pay.”
Security Experts vs Business Lobby
This deal is not sitting well with everyone.
US national security experts argue that chips like H20 could accelerate China’s artificial intelligence projects — and AI is considered equivalent to military power in today’s world.
Lisa Tobin, a China specialist, remarked sharply:
“Today it’s H20 chips, tomorrow will we be paying 15% commission on F-35 fighter jets?”
On the other hand, corporate lobbyists say this deal is a ‘compromise’ — losing a massive market like China could threaten US tech leadership.
China’s Reaction: Sweet and Bitter
In Beijing, the news received mixed responses.
- Positive side: The US has resumed chip exports, which is a relief for China’s AI industry.
- Negative side: The 15% “cut” is not welcomed as China sees it as an economic pressure tactic.
Meanwhile, China still wants the US to ease the export ban on HBM (High Bandwidth Memory) chips, which are an essential part of any high-end AI chip.
How Does This Fit Into Trump’s Strategy?
Politically, this deal fits perfectly into Trump’s electoral narrative.
Under this agreement,
- The US maintains control over national security.
- Companies can earn hefty profits selling chips to China.
- Most importantly — the government gains billions of dollars directly.
This deal acts like a new hybrid model of tax and tariff in Trump’s ‘America First’ policy.
What’s the Next Move?
The biggest question now is — will this model be applied to other sectors in the future?
Will Boeing planes or defense contractors someday sign similar deals?
If this succeeds, the US will have a ‘double benefit’ strategy — control over technology and steady cash flow.
Conclusion
This deal is not just about chips, but a significant example of economic diplomacy. It’s a blend of security, technology, politics, and business that could reshape the global tech trade landscape.
Nvidia and AMD have so far refrained from making major statements, but one thing is clear: this 15% deal has opened a new chapter in international tech commerce.
In the coming months, it will become evident whether this policy will truly be a ‘win-win’ or spark a new rivalry between the two superpowers.
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