Nvidia, AMD granted licenses to sell chips in China after profit deal with Trump administration

According to media reports on Sunday, the United States government will get 15% of the profits from the sale of artificial intelligence chips to China from the multinational semiconductor companies Nvidia and Advanced Micro Devices. According to sources in the Financial Times, Bloomberg, and New York Times, Nvidia CEO Jensen Huang met with U.S. President Donald Trump at the White House on Wednesday and consented to give the federal government a part of company profits. This is a very uncommon arrangement in the global IT industry. AFP was unable to confirm the reports right away. The top semiconductor manufacturer in the world, Nvidia, became the first business to reach $4 trillion in market value last month, and investors are placing bets that AI will revolutionize the global economy. However, the California-based company is now embroiled in trade disputes between the US and China, who are engaged in a fierce competition for control of the semiconductors that drive artificial intelligence.

For reasons of national security, the United States has been limiting the chips that Nvidia is able to ship to China. Last month, Nvidia announced that Washington had promised to allow the business to sell its “H20” chips—a less potent kind that the tech giant created especially for the Chinese market—to China. Prior to the alleged White House meeting, Nvidia was not granted licenses by the Trump government to sell the chips. However, according to the sources, the Commerce Department began awarding licenses for chip sales on Friday.

Additionally, the Silicon Valley-based Advanced Micro Devices (AMD), which was previously prohibited from exporting its MI308 chips to China, would pay 15% of sales proceeds in that nation. The New York Times said that the contract might bring in over $2 billion for the U.S. government. The action is part of the Trump administration’s aggressive tariff policy, which aims to resolve US trade imbalances, reshore manufacturing, and pressure foreign governments to alter their policies. With the exception of IT firms who declare significant investments in the US, a 100% tariff on a large number of semiconductor imports went into force last week.