U.S. chipmakers Nvidia and AMD will pay the U.S. government 15% of revenue generated by sales of their AI chips in China, a White House official confirmed to CBS News.
The Financial Times on Sunday reported that the agreement between the tech giants and the U.S. government was reached as a condition for granting export licenses for China, which were provided last week. A U.S. official confirmed the “broad strokes” of the report to CBS.
The arrangement, with companies providing a stream of revenue in exchange for export licenses, is highly unusual as corporations typically do not pay the federal government a share of revenue from their export sales. Export licenses also do not carry any fees, according to shipping giant Maersk.
The revenue-sharing plan comes after the White House announced in April that it would restrict sales of Nvidia’s H20 chips and MI308 chips from rival chipmaker AMD to China. However, Nvidia CEO Jensen Huang last month said it had won approval from the Trump administration to sell its H20 chips to China.
The H20 chip, which is specialized for artificial intelligence applications, was developed by Nvidia for the Chinese market, while AMD’s MI308 chips are also geared for AI.
It is unclear how the Trump administration would use the money generated from the chip sales.
Nvidia didn’t comment on the specifics of the deal. In a statement, a spokesperson said, “We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.”
AMD did not immediately respond to a request for comment.
Proponents of restrictions on sales of advanced chips to China say they are necessary to ensure the U.S. maintains a competitive edge as the two countries battle for AI dominance. They’ve also been viewed as a security safeguard. In one instance during the Biden administration, the Commerce Department said it was updating its export controls and said advanced AI capabilities “present U.S. national security concerns.”
“These controls were strategically crafted to address, among other concerns, the PRC’s efforts to obtain semiconductor manufacturing equipment essential to producing advanced integrated circuits needed for the next generation of advanced weapon systems,” the department said in a 2023 release.
The Associated Press
contributed to this report.
Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at “60 Minutes,” CBSNews.com and CBS News 24/7 as part of the CBS News Associate Program.
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