Nvidia And AMD Pay 15% Chip Sales Revenue To China For US Government

JAKARTA - Nvidia and AMD have agreed to provide 15% of the revenue from the sale of advanced computer chips to the United States government. This was conveyed by a US official on Sunday, August 10, in a rare and potentially surprising move by US companies.

The administration of US President Donald Trump previously stopped selling H20 chips to China in April 2025. However, in July 2025, Nvidia announced that Washington had allowed the sale back and hoped to start deliveries soon.

Another US official on Friday, August 8, said the US Commerce Department had begun issuing licenses for the sale of the H20 AI chip to China. The two officials declined to be named because details of the deal had not been publicly announced.

Analysts warn that this new levy could suppress the profit margins of both companies. Nvidia shares fell by about 1% and AMD nearly 2% in pre-market trading on Monday, August 11.

The agreement to pay the US government for sales in China is unusual and Trump's latest intervention in corporate decision making. Trump has often pressured company executives to invest in America to strengthen jobs and domestic manufacturing. Last week, he also demanded that Intel's new CEO, Lip-Bu Tan, immediately resign because he was considered to have a conflict of interest related to relations with Chinese companies.

The US official said the Trump administration did not consider selling H20 chips and equivalent chips a national security threat. However, Geoff Gertz, a senior researcher at the Center for New American Security, questioned the logic of this policy.

"If the sale of the H20 chip to China is a national security risk, we shouldn't have done it. But if it's not a risk, why do we give an additional penalty?" he said.

Spokesman Nvidia confirmed that it complies with US government regulations. "We haven't sent H20 to China in recent months, but we hope export rules allow America to compete in the Chinese and global markets," Nvidia representatives said.

Cut Nvidia Sales

Nvidia previously warned that the ban on H20 sales to China could cut sales by $8 billion (approximately IDR 130.64 trillion) in the July quarter. AMD also estimates its revenue this year will decrease by 1.5 billion US dollars (approximately IDR 24.49 trillion) due to the restrictions.

The Financial Times reports that this 15% payment deal is a requirement to obtain a chip export license, including AMD's MI308 chip. The US government has not yet decided how the funds will be used.

US Commerce Secretary Howard Lutnick last month stated that the re-sale of the AI chip was part of negotiations with China regarding the supply of rare minerals. He called H20 Nvidia's fourth-best chip and considered it better for Chinese companies to use American technology even though the most advanced version was still banned from exports.

Nvidia generated revenue of 17 billion US dollars (approximately IDR 277.61 trillion) from China in the fiscal year ending January 26, equivalent to 13% of total global sales. AMD recorded 6.2 billion US dollars (approximately IDR 101.25 trillion) from China in 2024 or 24% of total revenue.

According to Bernstein analysts, providing some of this revenue to the US government will lower the gross margin of the chip by 5'15 percentage points, which ultimately reduces the overall gross margin by about 1 point.