After months of lost sales, the US gives Nvidia and AMD the green light to sell AI chips to China… in exchange for a healthy cut of the revenue.

From “You’re Banned” to “We’ll Take a Cut”

For months, Nvidia and AMD watched one of the world’s biggest artificial intelligence (AI ) markets slip through their fingers. The US government’s ban on selling certain high-performance chips to China didn’t just sting — it torched billions in potential revenue. Nvidia’s H20 and AMD’s MI308, chips designed specifically to thread the needle of Biden-era export rules, were dead in the water after an April prohibition from the Trump administration.

Nvidia had reason to sweat. Bernstein analysts reckoned that before the controls, Nvidia could have shifted around 1.5 million H20 chips to China in 2025, worth roughly $23 billion. AMD, while a smaller player in the AI chip feeding frenzy, was facing a similarly bruising loss of access to the world’s second-largest economy.

But in Washington, nothing is permanent except political convenience — and perhaps tariffs.

The 15% Cover Charge

Last week, the Bureau of Industry and Security began issuing the long-awaited export licenses. The catch? Nvidia and AMD must hand over 15% of their China chip revenues directly to the US government. For Nvidia, that’s 15% of H20 sales. For AMD, 15% of MI308 sales. Both companies have confirmed the arrangement in broad strokes, though AMD has kept its public comments to a minimum.

Yes, you read that right, 15% of the revenue.

A US official described the deal as “unprecedented” — no American company has ever been asked to part with a slice of its revenues in exchange for an export license. A 15% levy doesn’t exactly erase any national security risks, raising the awkward question: if the chips were such a threat in April, why is selling them now okay as long as Washington gets paid?

“You either have a national security problem or you don’t,” Deborah Elms of the Hinrich Foundation told the BBC. “If you have a 15% payment, it doesn’t somehow eliminate the national security issue.”

How We Got Here

The H20 was born out of compromise. When the Biden administration slapped strict AI chip export controls on China in 2023, Nvidia engineered a version that sat just under the limits, allowing it to keep a foot in the market. Trump’s April ban on the chip closed that loophole — until CEO Jensen Huang personally lobbied the president.

Within days of their White House meeting, licenses began flowing. Officially, the reversal comes as part of broader US-China trade talks, which have included Beijing loosening rare earth export controls and Washington easing restrictions on chip design software firms. Both sides appear to be having a breather, with no clear outcome at this point. Unofficially, it fits a pattern: Trump’s administration has a habit of striking deals where companies pay, build, or invest their way back into favor. The Art of the Deal, anyone?

Beijing’s Not Exactly Cheering

While Wall Street is likely to welcome the return of Chinese sales, the chips themselves are under new scrutiny from the buyer’s side. Chinese regulators have hauled Nvidia in for questioning about alleged “backdoor” vulnerabilities, including claims the hardware could enable remote shutdowns. Of course, Nvidia denies this.

For now, there’s no sign Beijing will block the imports outright — especially given its own need for cutting-edge AI hardware — but the political and security baggage isn’t going away.

A Price Worth Paying?

From Nvidia’s perspective, 15% is steep but survivable, especially when the alternative is zero China sales. The company’s statement to the BBC was pragmatic: “We follow rules the US government sets for our participation in worldwide markets […] America cannot repeat 5G and lose telecommunication leadership.” Translation: it’s better to pay the toll, but the US needs to be careful.

For AMD, the deal could mean a valuable foothold in a market where it trails Nvidia badly in AI hardware. But the precedent is startling — not just for chipmakers, but for any US tech firm caught in the geopolitical crossfire.

Charlie Dai of tech and business research firm, Forrester, summed it up: “The arrangement underscores the high cost of market access amid escalating tech trade tensions, creating substantial financial pressure and strategic uncertainty for tech vendors.”

The Bigger Game

The 15% deal is a microcosm of the current US-China relationship: an uneasy mix of rivalry, mutual dependence, and transactional fixes. As of now, both sides are still negotiating over tariffs and tech access, with a 90-day truce in place but no long-term agreement in sight.

If this experiment works, Washington may have found itself a new policy lever: turning export controls into revenue streams. But as former National Security Council China expert Liza Tobin quipped, “What’s next — letting Lockheed Martin sell F-35s to China for a 15 per cent commission?”

For Nvidia and AMD, the calculation is simple. They’ve been let back into one of the most lucrative markets on the planet. The price is high, the politics are messy, but the alternative was watching competitors fill the gap. In the end, sometimes you pay the toll and keep driving.

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