Nvidia and AMD China Chip Sales Face New 15% Revenue Cut

The US government has lifted its recent ban on Nvidia and AMD selling certain advanced chips to China, but with a new condition—15% of all sales revenue from these deals must go directly to the US government. This move comes after previous restrictions aimed at limiting China’s access to high-performance processors used in artificial intelligence and advanced computing. While the policy allows these tech giants to resume business, it also raises questions about the balance between economic opportunity and national security.

Why the US Revenue Cut Was Introduced

The decision stems from ongoing concerns about China’s growing AI capabilities, especially in both civilian and military applications. The Biden-era sanctions, now expanded by the Trump administration, originally sought to limit China’s access to top-tier processors like Nvidia’s H20 and AMD’s MI308. Experts have warned that these chips could be repurposed for military advancements, giving China a potential edge in AI-driven defense technologies. By adding a revenue cut, the US aims to benefit financially while still exerting partial control over the flow of critical hardware.

Impact on Nvidia and AMD’s Global Strategy

For Nvidia and AMD, the new arrangement is a double-edged sword. On one hand, the companies regain access to a lucrative market after a complete sales ban. On the other, the 15% tariff could cut into profit margins, forcing both to reassess their pricing strategies and production plans. China remains a significant consumer of AI-capable processors, meaning neither company can easily ignore the market despite tighter financial and political constraints.

Ongoing National Security Debate

The policy shift reignites debate over whether financial measures are enough to address national security risks. Critics argue that allowing the sale of high-performance chips, even with a revenue cut, still enables China to strengthen its AI and defense programs. Supporters counter that this approach maintains US influence over trade while generating government revenue. As technology competition between the US and China intensifies, Nvidia and AMD’s China chip sales are likely to remain at the center of both economic and security discussions in the years ahead.