Nvidia (NVDA) and Advanced Micro Devices (AMD) plans to resume sales of key AI chips to China are set to come with some big strings attached.
Both companies have agreed to pay 15% of their China chip revenues to the U.S. government in exchange for export licenses, a U.S. official confirmed, after the Trump administration tightened restrictions earlier this year citing national security concerns.
Trump told reporters in a press conference Monday that he initially pressed Nvidia CEO Jensen Huang to agree to a higher 20% rate, but that the CEO had countered with 15%. “So we negotiated a little deal,” Trump said.
The president also suggested he could be open to expanding Nvidia’s licenses to cover more powerful chips, after further negotiations and modifications to Nvidia’s lineup for the China market. The H20 chip that Nvidia now expects to receive approval to start selling in China again is less powerful than its latest models, and had been tailored to meet Biden-era guidelines. Its most advanced chips are still prohibited from being sold in China.
A spokesperson for Nvidia told Investopedia, “We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America’s AI tech stack can be the world’s standard if we race.” AMD did not immediately respond to a request for comment.
Both chipmakers have taken a financial hit from the Trump administration’s curbs this year, with AMD last week reporting an $800 million charge in the second quarter related to restrictions on the sale of its AI chips to China. Nvidia said in May that it expects to report an $8 billion hit from export restrictions when it releases its quarterly results later this month.
Shares of AMD were about 1% higher in recent trading, while Nvidia shares were little changed.
The Nvidia deal, which comes after several high-profile visits by CEO Huang to the White House, marks a notable shift in how American companies and their leaders may be expected to engage with the government and respond to trade policy changes.
Last week, President Trump said Apple (AAPL) and others with public pledges to build in the U.S. could win exemptions from new semiconductor tariffs, after CEO Tim Cook joined Trump at the White House to announce a $100 billion commitment to U.S. production.
Separately, Intel (INTC) CEO Lip-Bu Tan is is set to to meet with Trump at the White House today, after the president called for his resignation, The Wall Street Journal reported.
This article has been updated since it was first published to include additional information and reflect more recent share price values.