Nvidia and AMD agree to pay 15% of chip sales revenue in China

• Nvidia and AMD will pay 15% of their revenue from chip sales in China to the U.S. government.
• The agreement helps obtain licenses for chip exports to the Chinese market.
• Sales of H20 chips were previously banned due to national security concerns, but the ban has been lifted.

Nvidia and AMD have agreed to pay 15% of their revenue from chip sales in China to the U.S. government. This agreement is part of the conditions for obtaining export licenses for sales to manufacturers in China. As reported by Financial Times, this information was confirmed by one of the U.S. officials.

Along with the agreement, Nvidia will pay 15% of its revenue from the sales of its H20 chips, while AMD will pay from the sales of its MI308 chips. This step has become necessary for obtaining the licenses that were issued last week.

This is the first instance where American companies agree to a similar financial arrangement for obtaining export licenses. Earlier, the U.S. government banned H20 chip sales to China due to national security concerns. However, recently this ban was lifted, allowing Nvidia to resume sales.

Nvidia developed the H20 chip specifically for the Chinese market, adhering to new export controls introduced by the Biden administration in 2023. The company plans to continue its operations in the Chinese market, regardless of previous restrictions.

A Nvidia representative stated that the company complies with the rules established by the U.S. government for participation in global markets. AMD has not yet provided comments on this matter.

Tags: USA/China/Technology