A White House-approved 15% skim on China-bound AI chip sales promises cash to the U.S. while keeping advanced tech out of Beijing’s hands—raising tough legal questions and big stakes for national security and industry.
Story Snapshot
- Trump confirmed Nvidia and AMD will remit 15% of China AI chip revenues to the U.S. in exchange for export licenses.
- Approved chips are constrained-performance parts like Nvidia’s H20 and AMD’s MI308, framed as “old” versus cutting-edge.
- ABC reports the quid pro quo has little or no precedent; Fortune flags potential constitutional concerns.
- Export controls paused advanced chip sales in April, with licensed, limited exports resuming under the new arrangement.
What Was Agreed: Licenses for Limited Chips, 15% to the U.S.
President Trump confirmed an arrangement under which Nvidia and AMD can resume selling constrained AI accelerators to China if they remit 15% of their China-derived revenues to the U.S. government. The licensed parts include Nvidia’s H20 and AMD’s MI308—chips designed to meet tightened export thresholds. A White House official told ABC the remittance is tied specifically to export approvals, while Fortune detailed Trump’s public remarks and negotiation framing. Both outlets agree the 15% applies to China sales revenue.
According to reporting, the administration paused advanced AI chip sales to China in April over national-security concerns, then signaled in July that sales of compliant parts could resume under license. Nvidia stated it would follow U.S. rules, noted it had not shipped H20 to China for months, and urged stable export guidance. The structure attempts to balance managed commerce with strategic controls, reopening revenue while maintaining barriers against state-of-the-art capabilities reaching Chinese buyers.
Why H20 and MI308 Are Allowed: “Old” and Compliance-Oriented
Trump characterized Nvidia’s H20 as essentially an “old” chip and suggested China already has it in a different form, a framing meant to distinguish approved sales from prohibited cutting-edge technology. The H20 emerged after successive control tightenings pushed vendors to engineer “compliant” SKUs with curtailed performance and interconnect. That two-tier approach preserves U.S. leadership in top-line AI compute while enabling limited, regulated exports of downgraded parts, aligning national-security aims with commercial realities.
Since 2022, U.S. export controls have targeted performance metrics and networking features that enable large-scale AI training. Vendors responded with China-only or compliance variants, earlier including A800/H800 and later the H20 under stricter rules. The current model continues that trajectory: allow mid-tier capability under license, restrict premier accelerators. For conservative readers focused on American strength, the message is clear—protect the crown jewels while extracting value from any limited access China receives through downgraded hardware.
Legal Novelty and Possible Challenges
ABC described the license-for-revenue remittance as having little or no precedent, underscoring legal novelty that may attract scrutiny. Fortune labeled the setup potentially unconstitutional, raising questions about statutory authority to condition export licenses on payments to the U.S. Treasury. Precise mechanics—calculation, auditing, scope for distributors or joint ventures—remain unspecified in public reporting. Those open questions could draw congressional oversight or court tests, even as companies prepare compliance systems to track and remit qualifying China revenues.
Trump defends taking 15% cut of Nvidia, AMD chip sales to China https://t.co/55bxqXiM5r pic.twitter.com/59O7qgLCK1
— New York Post (@nypost) August 11, 2025
Near-term, Nvidia and AMD regain access to China demand for licensed, lower-spec accelerators, with margins affected by the 15% take and potential price adjustments. Medium term, investors may normalize a government skim in sensitive markets, while Chinese buyers weigh licensed imports against domestic alternatives. Long term, the policy may set a precedent in strategic sectors: controlled exports, explicit economic capture for the U.S., and persistent pressure on adversaries’ access to frontier compute—an approach many security-minded conservatives view as overdue.
