11.08.2025 09:27

Nvidia and AMD experienced a downturn in their premarket share prices on Monday morning. This followed reports indicating both companies have agreed to a unique arrangement with the U.S. government, surrendering 15% of their AI chip sales revenue in China. The unusual deal, brokered under the previous administration, ostensibly secured necessary export licenses.

According to the Financial Times, this revenue share applies specifically to sales of certain AI chips in the Chinese market. Nvidia's contribution stems from their H20 chip, a modified version of the H100 designed to adhere to Chinese export regulations. Similarly, AMD agreed to a comparable arrangement concerning their MI308 chip. The agreement, confirmed by unnamed U.S. officials and those privy to the negotiations, was a prerequisite for the export licenses granted to both companies last week. The impact of this 15% levy on the final price paid by Chinese customers remains unclear.

This development led to a noticeable dip in share prices. Nvidia shares declined by 1.16%, settling at $180.61, while AMD experienced a more significant drop, falling 2.3% to $168.79. The financial implications for the U.S. government are substantial. Based on Nvidia CEO Jensen Huang's May estimate of $15 billion in H20 chip sales to China, the U.S. could potentially receive $2.25 billion from this arrangement. This contrasts with AMD's recent Q2 2025 earnings call, which reported an $800 million write-off attributed to export restrictions on its MI308 chips intended for the Chinese market. The full extent of AMD's financial contribution under this deal is yet to be determined. The arrangement highlights the complex geopolitical factors influencing the high-stakes semiconductor industry.