US semiconductor giants Nvidia and Advanced Micro Devices (AMD) have reportedly agreed to give the US government 15 percent of their revenue from selling artificial intelligence chips to China, according to media reports on Sunday.
Nvidia CEO Jensen Huang met with US President Donald Trump at the White House on Wednesday and consented to this unusual revenue-sharing deal, as reported by the Financial Times, Bloomberg, and the New York Times.
AFP has not yet confirmed these reports independently.
Investors are optimistic about AI’s potential to reshape the global economy, and last month Nvidia became the first company to reach a $4 trillion market valuation.
However, the California-based company is caught amid escalating trade tensions between the US and China, both competing fiercely to dominate the production of AI chips.
The US has been restricting which chips Nvidia can export to China on national security grounds.
Nvidia said last month that Washington had pledged to let the company sell its “H20” chips to China, which are a less powerful version the tech giant specifically developed for the Chinese market.
The Trump administration had not issued licenses to allow Nvidia to sell the chips before the reported White House meeting.
On Friday, however, the Commerce Department started granting the licenses for chip sales, the reports said.
Silicon Valley-based Advanced Micro Devices (AMD) will also pay 15 percent of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country.
The deal could earn the US government more than $2 billion, according to the New York Times report.
The move comes as the Trump administration has been imposing stiff tariffs, with goals varying from addressing US trade imbalances, wanting to reshore manufacturing and pressuring foreign governments to change policies.
A 100 percent tariff on many semiconductor imports came into effect last week, with exceptions for tech companies that announce major investments in the United States.
