US demands cut of Nvidia sales in order to ship AI chips to China

The Trump administration has ordered Nvidia and AMD to pay the federal government a 15 percent cut of their AI chip sales revenue to China, according to reports from The New York Times and The Financial Times. Nvidia CEO Jensen Huang reportedly reached an agreement with President Donald Trump just days before the Commerce Department granted the companies licenses to sell AI chips.

The approved shipments include Nvidia’s H20 and AMD’s MI308, both of which are stripped-down versions of their AI-focused GPUs, designed to comply with US export rules to China. After the Trump administration put restrictions on AI chip sales to China in April, both companies confirmed last month that they would soon resume shipments once they received licenses. Nvidia’s H20 chip came under fire last week after the Chinese government raised concerns that its chips could have a government “backdoor.”

President Trump said earlier this year that he weighed breaking up Nvidia before Huang embarked on a campaign of flattery, which ended up also winning the removal of AI chip export limits. Trump has inserted himself into other major business dealings in the name of national security, proposing a joint venture that would give the US government 50 percent ownership of TikTok and recently demanding the resignation of Intel’s new CEO, Lip-Bu Tan, over his connections to China.