Nvidia and AMD alleged to divide 15% of their Chinese GPU earnings for acquired export licenses - Potential unprecedented revenue-sharing agreement between the two companies could have been established
The U.S. government has reportedly agreed to a significant shift in its strategy regarding the export of advanced AI chips, allowing tech giants Nvidia and AMD to sell their cutting-edge products to China. This decision, not officially announced but reported by multiple outlets including BBC, FT, and Reuters, marks a departure from the original restrictions put in place due to national security concerns.
Under the new deal, 15% of the total combined revenue from the sale of advanced AI chips in China will go to the U.S. Treasury. According to the Treasury's liquidity strategy plans, this could add approximately 500 to 600 billion US dollars to its general account (TGA). In 2025, Tether also issued an additional 26 billion US dollars USDT, contributing to treasury reserves, further augmenting the inflow of funds.
The revenue figures for Nvidia and AMD in China are expected to increase significantly with this development. Nvidia, in a statement to Tom's Hardware, reiterated that they follow rules set by the U.S. government for worldwide market participation. The company hopes that the new export control rules will allow them to compete in China and worldwide.
Nvidia will be able to resume sales of the H20 chip, and AMD will be able to sell its MI308 accelerators into China. The combined revenue of Nvidia and AMD from China in their latest financial years was $17 billion and $6.2 billion respectively. Despite the potential increase in revenue, the 15% deal, when judged purely on financial terms, is considered 'small potatoes' for a country like the U.S.
The statement ends with the argument that America cannot afford to repeat the 5G mistake and lose telecommunication leadership, and that America's AI tech stack can be the world's standard if they race. The 15% deal only covers the advanced AI chips that require export licenses. The U.S. Commerce Department has reportedly started issuing H20 licenses last Friday.
This decision comes amidst growing global competition in AI technology and the race to establish dominance in this rapidly evolving field. The U.S. government's move to relax export controls on advanced AI chips is a step towards maintaining America's technological edge and ensuring its continued leadership in AI technology.
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