US considers allowing NVIDIA and AMD to export advanced AI chips to China under regulatory licensing requiring payment to US authorities.

Nvidia and AMD have agreed to pay the U.S. government 15% of the revenue they make from sales of high-end AI chips to China in exchange for licenses to sell those chips in the country, according to the Financial Times, citing anonymous government sources. Nvidia will share revenues from sales of its H20 AI chips in China, while AMD would share a cut of MI308 chip sales. The government has begun issuing licenses for the sale of both companies' chips under this arrangement.

The Trump administration initially restricted sales of certain high-performance AI inference chips to China in April, but paused the ban a couple of months later when Nvidia promised to make up to $500 billion worth of data center investments in the United States. In July, Nvidia announced it would resume sales of its H20 AI chips to China, a product the company had designed specifically for the Chinese market following restrictions imposed by the Biden administration. An Nvidia spokesperson stated: "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."

According to U.S. Commerce Secretary Howard Lutnick, Nvidia's change of course was related to trade discussions with China regarding rare-earth elements, which are necessary for making components like rechargeable batteries for electric vehicles. However, the administration's decision to approve the sale of Nvidia's H20 chips has faced criticism from national security experts and former government officials, who wrote to Lutnick last month urging the government to reverse course on the policy.