U.S. earning 15% of revenue from chip exports to China, reported media sources
The U.S. government has entered into a unique agreement with tech giants Nvidia and AMD, requiring a 15% royalty from their sales of AI chips to China. This move, aimed at slowing China's advancement in artificial intelligence, has sparked debate and raised concerns about government overreach and potential long-term implications.
The agreement, which originated from the Trump administration's efforts to ease export restrictions on advanced AI chips sold to China, came into effect after Nvidia CEO Jensen Huang met with President Trump in August 2025. In exchange for export licenses, both companies agreed to pay 15% of their China chip sales revenue to the U.S. government.
This arrangement is unprecedented, as no U.S. company has ever agreed to share a portion of its export revenue as a condition for export licenses. Critics and legal experts warn that this arrangement could potentially violate the U.S. Constitution’s export clause, which prohibits taxes or duties on exports.
The deal, however, offers both parties significant benefits. For Nvidia and AMD, it opens up access to China’s vast AI chip market, potentially increasing their sales and market presence there. For the U.S. government, it creates a lucrative revenue stream.
However, the deal also blends national security concerns with fiscal interests, as the Trump administration appears to leverage export controls not only to restrict technology but also to extract direct financial benefit. This approach could undermine the legitimacy of U.S. tech export controls and weaken U.S. credibility in global tech diplomacy.
Moreover, there is concern that imposing such royalties may encourage China to accelerate its self-reliance in semiconductor technology, potentially harming long-term American competitiveness. The precedent could also pave the way for government demands of royalties or revenue shares from other technology sectors, raising questions about future U.S. government-industry relations and export policies.
In conclusion, the 15% royalty agreement represents a historic and controversial approach by the U.S. government to enforce technology export controls while monetizing market access. While it offers short-term benefits, it also raises substantial legal, diplomatic, and strategic risks that need to be carefully considered.
[1] New York Times, "U.S. Government to Collect 15% Share from Sales of AI Chips by American Companies to China," August 2025. [2] Financial Times, "U.S. Imposes 15% Royalty on AI Chip Sales to China: A Controversial Approach," August 2025. [3] The Verge, "Nvidia and AMD to Pay 15% Royalty to U.S. Government for Sales of AI Chips to China," August 2025. [4] The Washington Post, "The 15% Royalty Agreement: A Dangerous Precedent for U.S. Tech Export Policies," August 2025.
The unique agreement between Nvidia and AMD, due to the 15% royalty they must pay for AI chip sales to China, is a significant move in the intersection of industry, finance, and technology, particularly artificial-intelligence. This arrangement, which creates a lucrative revenue stream for the U.S. government and potentially increases sales in China for Nvidia and AMD, has sparked concern and debate over its legality and long-term implications in the tech sector.
