A significant development in the ongoing US-China technology relationship has emerged with two major American semiconductor companies agreeing to share substantial portions of their Chinese artificial intelligence chip revenues with the United States government. This arrangement represents an unprecedented revenue-sharing model that intertwines corporate profits with government oversight in the competitive AI chip market.
Key Takeaways
- Two major semiconductor companies will pay 15 percent of their Chinese AI chip revenues to the US government in exchange for export licenses
- The arrangement covers specific advanced artificial intelligence chips including specialized processor models designed for machine learning applications
- This revenue-sharing agreement represents a new approach to managing technology trade between American companies and international markets
An unprecedented agreement
The agreement involves Nvidia sharing 15 percent of revenues from their H20 chip sales to Chinese markets, while Advanced Micro Devices will provide the same percentage from their MI308 chip sales. This revenue-sharing structure comes as part of securing export licenses for these advanced semiconductors, marking a notable shift in how American technology companies navigate international trade restrictions while maintaining access to crucial global markets.
American semiconductor companies Nvidia and AMD have entered into an unprecedented revenue-sharing agreement with the U.S. government. Both companies will transfer 15% of their artificial intelligence chip sales revenue from China to Washington as part of securing export licenses.
The arrangement allows Nvidia to sell its H20 chips in the Chinese market while AMD gains approval for its MI308 processors. This deal represents a departure from traditional export control mechanisms that typically rely on licensing fees rather than ongoing revenue sharing.
Key Details of the Agreement:
- Revenue Share: 15% of China AI chip sales
- Companies Involved: Nvidia and Advanced Micro Devices
- Chip Models: H20 (Nvidia), MI308 (AMD)
- Purpose: Secure export licenses for Chinese market access
The Financial Times first reported this unusual financial arrangement between the chip manufacturers and federal authorities. The deal addresses national security concerns while allowing continued business operations in one of the world’s largest semiconductor markets.
Export controls have traditionally focused on restricting technology transfer rather than creating ongoing revenue streams for government agencies. This new model establishes a direct financial link between private sector sales and federal oversight of sensitive technology exports.
The Commerce Department has not provided official comment on the revenue-sharing structure. Nvidia representatives indicated the company follows all U.S. government regulations for international sales operations.
Source: The Verge