Nvidia and Advanced Micro Devices have agreed to give the Trump administration a portion of the sales from their artificial-intelligence chips to China, unusual agreements that deepen their relationships with the U.S. government.
Nvidia CEO Jensen Huang
The Trump administration will receive 15% of the sales as part of a deal to approve exports of Nvidia’s H20 AI chip to China, according to people familiar with the matter. That could amount to billions of dollars given demand for the H20 chips and is the latest example of the White House employing novel tactics to raise revenue.
The administration has reached the same agreement with AMD for its MI308 chip, the people said.
The Commerce Department began issuing licenses for Nvidia to send its H20 chip to China Friday, following through on a July promise that marked a big win for Nvidia CEO Jensen Huang.
Exports of both the H20 and MI308 were halted in April, when trade tensions between the U.S. and China were simmering. Huang has gone on a charm offensive since then, talking to officials in both countries about the need to do business with one another.
It is unusual for companies to essentially pay for export licenses. The agreements follow criticism from national-security hawks who fear the chips and other technology will boost China’s AI ecosystem and military.
Nvidia has said its chips don’t get diverted to U.S. adversaries in large quantities. Administration officials say the H20 isn’t a top-performing chip and that they want Nvidia to compete with China’s Huawei around the world.
The revenue agreement came after Huang met with President Trump on Wednesday, the same day he announced tech companies that invest in the U.S. would be exempt from new chip tariffs. The Financial Times earlier reported on the agreement.
The Nvidia licenses are some of the only licenses being granted while the U.S. and China continue negotiating on trade. Access to semiconductors is one of the biggest priorities for the Chinese and advantages for the U.S.
Nvidia developed the H20 specifically for the Chinese market in 2023 after the Biden administration placed export restrictions on more advanced AI chips. The chip uses the company’s Hopper architecture, which allows for tens of thousands of cores, or processing units that can each handle simultaneous computations, and which is less powerful than Nvidia’s latest series, known as Blackwell.
The chip isn’t advanced enough to quickly train large language AI models, but is useful for inference functions, or the processes by which models that have already been trained can draw conclusions from new data.
Chinese authorities have also raised concerns about H20 chips, cautioning that they aren’t environmentally friendly and could come with security risks. Nvidia said this month that the chips don’t have so-called “backdoors” that allow them to be controlled or accessed remotely.
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