According to a U.S. official to Reuters on Sunday, Nvidia (NVDA.O) and AMD (AMD.O) have agreed to donate 15% of their revenues from sales of sophisticated computer AI chip sales in China, such as Nvidia’s H20, to the U.S. government.
While U.S. President Donald Trump’s government banned H20 AI chip sales in China in April, Nvidia said last month that the U.S. government would allow the firm to continue these sales, implying hope for an imminent delivery. Another U.S. official said on Friday that the Department of Commerce had begun licensing H20 chips for China sales.
Asked about Nvidia’s decision to pay 15% of its income to the United States, a representative for Nvidia said, “We follow rules the U.S. government sets for our participation in worldwide markets.” The spokesperson continued, “While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”
AMD has not yet answered a request for comment on this news, which was first reported earlier on Sunday by the Financial Times. Also missing an instantaneous answer to a request for comment was the U.S. Department of Commerce. Likewise, without a response is a request for comment from China’s foreign ministry.
For both Nvidia and AMD, China is a significant market. Nvidia generated $17 billion in revenue from China for the fiscal year ended January 26, about 13% of its overall sales. AMD, meanwhile, reported 2024 revenues from China of $6.2 billion, 24% of its overall revenue.
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The Financial Times reports that the chip companies agreed to this as a requirement for getting export permits for their semiconductors, including AMD’s MI308 devices. The report further said that the allocation of the funds created from this agreement is still unknown.
Geoff Gertz, a senior fellow at the Center for New American Security, an independent think tank based in Washington, D.C., remarked, “It’s wild.”