In a bid to secure export licenses, Nvidia and AMD have concluded an agreement to contribute 15% of their sales revenue from semiconductor products in China to the US government. This follows recent shifts in the trading relationship between the US and China, marked by an easing of tensions and a renewed focus on regulations surrounding tech exports.
Nvidia and AMD Strike Deal to Pay US Government for China Revenue
Nvidia and AMD Strike Deal to Pay US Government for China Revenue
Chip makers Nvidia and AMD to remit 15% of their semiconductor earnings from China as part of a new agreement with the US government.
Nvidia CEO Jenson Huang has confirmed the deal, stating, "We follow rules the US government sets for our participation in worldwide markets," pointing to the importance of complying with US regulations amidst ongoing trade discussions. The agreement specifically entails Nvidia paying 15% of its earnings from sales of the H20 chip in China, while AMD will contribute a similar percentage from its MI308 chip revenues.
This new arrangement comes after the US previously imposed restrictions on the sale of Nvidia's H20 chips to China due to national security concerns. The ban was originally enforced during Trump's administration and was only recently reconsidered. Notably, Huang has been actively engaging with government officials, including a meeting with President Trump last week, to advocate for the resumption of chip sales.
The lifting of trade barriers follows a period of escalating tensions between the superpowers, with significant moves such as China easing its rare earth export controls and the US rescinding restrictions on chip design software firms operating within China. Moreover, a truce was declared in May, pausing tariff escalations between the two nations for 90 days, allowing further discussions on future trade relations to take place. Trade representatives from both countries have held multiple meetings since, although final confirmation of a continued pause on tariffs remains pending, with a deadline set for August 12.
This new arrangement comes after the US previously imposed restrictions on the sale of Nvidia's H20 chips to China due to national security concerns. The ban was originally enforced during Trump's administration and was only recently reconsidered. Notably, Huang has been actively engaging with government officials, including a meeting with President Trump last week, to advocate for the resumption of chip sales.
The lifting of trade barriers follows a period of escalating tensions between the superpowers, with significant moves such as China easing its rare earth export controls and the US rescinding restrictions on chip design software firms operating within China. Moreover, a truce was declared in May, pausing tariff escalations between the two nations for 90 days, allowing further discussions on future trade relations to take place. Trade representatives from both countries have held multiple meetings since, although final confirmation of a continued pause on tariffs remains pending, with a deadline set for August 12.
