Nvidia and AMD to Pay 15% of Semiconductor Sales Revenue in China to the US (Comprehensive)

[Financial News] Nvidia and AMD have agreed to provide 15% of their semiconductor sales revenue in China to the US government, according to a report by the Financial Times (FT) on the 10th (local time). 
FT reported on this day, citing sources familiar with the matter and government officials, "Nvidia and AMD have agreed to pay 15% of their semiconductor sales revenue in China to the US government as a condition for obtaining export permits to the Chinese market." Nvidia must pay 15% of the sales revenue of the China-exclusive chip H20, and AMD must pay 15% of the sales revenue of MI308 to the US government. 
According to US market research firm Bernstein, Nvidia is estimated to have sold about 1.5 million H20 chips in China this year, generating approximately $23 billion in revenue. It is not yet known how the US government will use this revenue.
This mutual compensation agreement regarding export permits is unusual. 
FT stated, "There is no precedent for US companies agreeing to pay part of their revenue to obtain export permits," adding, "This deal aligns with the Trump administration's (negotiation) pattern of inducing domestic investment and job creation through 'tariffs'."
This agreement came amid criticism from US security experts regarding the Trump administration's reversal of the H20 export ban.
Previously, when the Biden administration banned the export of advanced chips like the H100 in 2022, Nvidia and AMD responded by designing the H20 and MI308 with reduced performance exclusively for the Chinese market. 
However, the Trump administration took a hard stance by banning the sale of these chips to China in April, blocking the companies' sales channels in China. Subsequently, Jensen Huang, CEO of Nvidia, met with President Trump at the White House in June, and the Trump administration decided to allow the resumption of exports.
However, three weeks passed without the US Department of Commerce issuing export permits for the H20 chips, preventing actual sales to China. CEO Huang met with President Trump again, and two days later, on the 8th, the Department of Commerce began reissuing export licenses. 
US security experts have warned that the H20 could aid the Chinese military and weaken the US's artificial intelligence (AI) capabilities. Matthew Pottinger, former Deputy National Security Advisor at the White House National Security Council (NSC), and 20 other security experts recently sent a letter to Secretary of Commerce Howard Lutnick, arguing that allowing the export of H20 chips to China would threaten the US's economic and military superiority in the AI field.
Meanwhile, President Trump expects this negotiation to lead to a summit meeting with Chinese President Xi Jinping, according to FT. The US is currently engaged in trade negotiations with China. It is known that the Chinese government is requesting the US to ease export restrictions on high-bandwidth memory (HBM) chips, which are essential components for AI chip manufacturing. 

sjmary@fnnews.com Seo Hye-jin Reporter