According to the Financial Times, Nvidia and AMD are entering a groundbreaking trade deal which mandates that they will remit 15% of their revenue derived from chip sales in China to the US government. In exchange, these companies will obtain export licenses to sell semiconductors within the Chinese marketplace.

They are specifically targeting Nvidia’s H20 chips and AMD’s MI308, with this 15% tariff applying only to their sales.

The H20 chip has been contentious, leading former President Joe Biden to establish export restrictions on advanced chips that might serve AI purposes. Notably, a US politician had suggested adding trackers to disable chips that made their way to China. According to security specialists in the US, the H20 could support the Chinese military, threatening US prowess in artificial intelligence. Nvidia labeled these concerns as ‘misguided’.