Jensen Huang Responds as US to Claim 15% of Nvidia and AMD China Revenues
In a major shift in U.S.–China technology trade, Jensen Huang, CEO of Nvidia, has responded to the United States’ move to claim 15 percent of revenue from advanced chip sales to China by Nvidia and AMD. In the deal, the payment is tied directly to the granting of U.S. export licenses for high-performance AI chips.
For the tech world, this marks a turning point in how Washington handles sensitive semiconductor exports. For Nvidia and AMD, it is a way to resume sales in one of their biggest markets, China, without breaching U.S. security rules.
How did this deal come about?
The agreement follows months of tension between Washington and Beijing over AI chip access. Earlier in the year, the U.S. imposed strict bans on exporting Nvidia’s H20 and AMD’s MI308 chips to China. These products are considered critical for AI model training and advanced computing.
Former President Donald Trump, according to reports from CNBC, initially pushed for a 20 percent revenue share. Jensen Huang personally negotiated the figure down to 15 percent. This, insiders say, was a calculated move to keep the door open for U.S. chipmakers in the Chinese market while avoiding a complete market cutoff.
A look back at how we got here
The roots of this 15 percent deal go back to late 2022, when the U.S. first restricted the sale of Nvidia’s A100 and H100 AI chips to China. Those rules were tightened in 2023, blocking even modified models like the A800. By early 2024, export licenses became mandatory for high-end semiconductors destined for China.
In April 2025, the Biden administration briefly halted all advanced AI chip sales to China. This forced companies like Nvidia to delay shipments of its new H20 model and pushed AMD to freeze deliveries of its MI308. Without access to these chips, Chinese tech firms struggled to train large AI models at scale.
The 15 percent revenue share arrangement is the first compromise since the bans began, allowing limited sales while ensuring Washington still holds strategic control.
Why is the US asking for 15 percent?
The U.S. government says this structure ensures two things:
- Revenue from these sales flows back to the United States.
- Export controls remain intact, preventing the sale of the most powerful AI chips that could be used for military applications.
As Bloomberg noted in this tweet, the arrangement is “unprecedented,” blending trade policy and revenue collection in a way never before seen in the semiconductor industry.
What did Jensen Huang say?
In a statement, Jensen Huang avoided confirming the exact revenue share terms but made it clear Nvidia would follow the law. He said:
“We follow the rules the U.S. government sets. While we haven’t shipped H20 to China for months, we hope the export control rules will allow America to compete in China and worldwide.”
This reflects his pragmatic style, focusing on compliance and competitive positioning rather than political disputes.
Not everyone is on board
While the deal allows chip shipments to resume, critics in both political parties have raised concerns. Some lawmakers worry that accepting a percentage of revenue sets a dangerous precedent, turning national security tools into financial instruments.
Economist Derek Scissors, quoted by AP News, called it “a disguised tax” that could be unconstitutional. Others, like policy analyst Saif Khan, have warned that even reduced-spec chips could still power AI systems China might use in sensitive sectors.
As NKD Advisory highlighted on X, the debate is already spilling into trade policy discussions, with questions about whether similar arrangements could be applied to other high-tech exports.
The stakes for Nvidia and AMD
China is a vital market. Nvidia earns roughly 13 percent of its revenue, about $17 billion annually, from China. AMD relies on China for about 24 percent, or $6.2 billion. Losing this market would be a serious blow, especially given the intense competition in AI and data center chips.
That’s why Huang’s ability to secure export clearance, even with a 15 percent revenue give-up, is seen by many investors as a win. As market analyst Fink Money pointed out in this tweet, “15% is better than 100% loss of market share.”
Impact on the US–China AI race
By letting scaled-down AI chips back into China, the U.S. may have avoided driving Chinese buyers entirely toward domestic suppliers. This could slow China’s shift to fully homegrown AI hardware.
However, even reduced-performance chips like the H20 and MI308 can still train advanced AI models, just at a slower pace. Analysts warn that China could compensate by building larger clusters of these chips, potentially matching performance over time.
For the U.S., the move keeps its technology footprint inside China, offering both economic benefits and strategic oversight. For China, it provides breathing room while it continues to invest heavily in domestic chip design.
Could this expand to other chips?
Trump has hinted that more powerful chips could also be exported to China in the future under similar arrangements. That possibility excites Wall Street but alarms national security experts.
In a post on X, Hemant Mohapatra remarked that this “turns export licensing into a negotiation tool rather than a straight policy decision,” potentially blurring the lines between commerce and security.
A bigger picture of tech diplomacy
The deal reflects a broader U.S. strategy: keep American technology in Chinese markets but on U.S. terms. This allows Washington to maintain influence over China’s AI supply chain while collecting revenue that can be reinvested domestically.
From a diplomatic perspective, it is a balancing act, showing strength without completely cutting off a key trading partner. For companies like Nvidia and AMD, it’s a lifeline that preserves revenue and market presence.
Not the first high-tech trade compromise
The semiconductor industry has seen similar political deals before. In the 1980s, the U.S. signed a semiconductor trade agreement with Japan to limit exports and ensure fair market access, easing tensions in a fiercely competitive industry.
Even earlier, during the Cold War, Washington restricted supercomputer exports to the Soviet Union but allowed limited sales under controlled conditions. These arrangements were designed to protect national security while maintaining some level of trade, a delicate balance much like today’s Nvidia–AMD deal.
What’s next for Jensen Huang and Nvidia?
Jensen Huang has proven himself as a negotiator as well as a tech visionary. By securing a deal that avoids an outright ban, he has kept Nvidia in the Chinese market while complying with U.S. export laws. The challenge now will be navigating the political and legal scrutiny that may follow.
Congress could still challenge the legality of the arrangement. Court cases could emerge questioning whether the executive branch can levy what critics see as a tax without legislation.
Video breakdown of the deal
For a visual explanation of how this revenue-sharing deal works, you can watch this detailed breakdown on YouTube. The video outlines the timeline of events, the political negotiations behind the scenes, and the potential impact on both companies’ future strategies.
Final thoughts
This is more than just a business deal. It is a new model for how technology companies may navigate great-power competition in the coming years. By blending diplomacy, business pragmatism, and national security, Jensen Huang has set a precedent others may follow, or fiercely oppose.
Whether this becomes a template for future trade policy or an isolated experiment will depend on political will in Washington, economic conditions in China, and the evolving needs of the global AI industry.
Looking ahead
Over the next year, this agreement could evolve in unpredictable ways. If relations between Washington and Beijing improve, the 15 percent cut might be reduced or removed entirely. On the other hand, if tensions rise, especially over Taiwan or cybersecurity issues, export licenses could be suspended again.
There is also a risk that China could retaliate by restricting U.S. companies’ access to rare earth materials or banning Nvidia and AMD products altogether, pushing Chinese firms to accelerate domestic chip production.
For Jensen Huang, the challenge will be to navigate these uncertainties while keeping Nvidia’s technology relevant in the world’s second-largest economy. The stakes are high, and the next move could redefine global AI competition.
FAQ’S
Around 13 percent, or about 17 billion dollars, comes from the Chinese market.
The first restrictions came in late 2022, with expanded bans in 2023 and April 2025.
Nvidia’s market capitalization is over 2.7 trillion dollars as of August 2025.
China is a huge market for AI chips, and leaving would mean losing billions in revenue.
Huawei’s Ascend chips are considered a major domestic rival in China.
Data center products, especially AI chips, make up the largest share of Nvidia’s revenue.
U.S. export controls limit the sale of Nvidia’s most advanced chips to China.
Yes, under the new deal, AMD can sell scaled-down AI chips to China with a 15 percent revenue share to the U.S.
Nvidia designs its chips, but manufacturing is mostly done by Taiwan Semiconductor Manufacturing Company (TSMC).
Disclaimer
This content is made for learning only. It is not meant to give financial advice. Always check the facts yourself. Financial decisions need detailed research.