US demands Nvidia sales cut could unlock $2B yearly

Key Points

• US demands Nvidia sales cut could bring $2B yearly
• US orders Nvidia, AMD to pay 15% commission on AI chip sales to China
• Trump negotiated the deal directly with Nvidia CEO Jensen Huang
• Approved chips are downgraded to meet US export rules
• Policy could set a new precedent in tech trade deals

The US government has taken an unprecedented step in tech trade policy, demanding a 15% cut of AI chip sales revenue to China from industry leaders Nvidia and AMD.

According to reports from The New York Times and The Financial Times, the agreement was finalized just days before the Commerce Department granted the companies licenses to resume shipments.

“This is a really, really dark day for our national security.”

Nvidia and AMD reached deals with the Trump administration to secure export licenses by agreeing to pay 15% of their revenues from certain Chinese AI chip sales to the US government. Rep. Raja Krishnamoorthi joins… pic.twitter.com/T23z5ANK7K

— Bloomberg TV (@BloombergTV) August 11, 2025

President Donald Trump confirmed the deal during a press conference, revealing that he initially pushed for a 20% share before Nvidia’s CEO Jensen Huang bargained it down.

“I said, ‘I want 20 percent if I’m going to approve this for you, for the country,’” Trump said. “And he [Huang] said, ‘Would you make it 15?’ So we negotiate a little deal.”

This unusual approach adds to a list of unpredictable revenue-generating moves from the administration,  including tariffs, settlements, and even AI-related policy pushes similar to those seen in the GPT-5 rollout challenges.

Trump must have been a street vendor in India in his previous life! 😆

Always bargaining for insignificant money.

The US gov will now impose “export tariffs” of 15% on AI chips sold by Nvidia and AMD to China. pic.twitter.com/k5eIN9caul

— S.L. Kanthan (@Kanthan2030) August 11, 2025

Chips approved but scaled down for China

The shipments greenlit under this arrangement include Nvidia’s H20 and AMD’s MI308,  both AI-focused GPUs that have been intentionally downgraded to comply with strict US export rules. The modifications limit computing capabilities, ensuring they don’t cross thresholds set by national security guidelines.

The sales were originally blocked after the April export restrictions targeting AI chips. However, both companies announced in July that they would soon resume exports once licenses were secured.

Trump wants his cut…Nvidia, AMD to pay 15% of China AI chip sales to the U.S. pic.twitter.com/wlaN8XXjdA

— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) August 11, 2025

Nvidia’s H20 chip has recently faced scrutiny from Beijing, with Chinese regulators claiming it might contain a government “backdoor”.

Trump dismissed these claims, saying the H20 is “an old chip that China already has.” He even hinted that the Blackwell chip, Nvidia’s next-gen GPU, could be approved for export if its performance was reduced by “30 to 50 percent.”

This practice of creating specialized export versions isn’t new; Apple has followed similar strategies in its chip technology development to meet varying regional regulations, though without direct government profit-sharing.

The US Constitution expressly forbids export taxes but I guess this “payment” isn’t a tax but a payout….🤔
U.S. Government to Take Cut of Nvidia and AMD A.I. Chip Sales to China https://t.co/PA3x6WvSix

— Douglas Irwin (@D_A_Irwin) August 11, 2025

Billions in new revenue for the US

The 15% commission could yield $2 billion annually for the US Treasury, making it more than just a political move; it’s a fiscal one.

Analysts point out that the Trump administration has consistently experimented with unconventional economic tactics, whether through tariffs, licensing fees, or high-profile tech negotiations.

The Times called the deal “highly unusual”, noting that it follows a series of headline-grabbing policy shifts. For example, the president recently threatened a 100% tariff on semiconductors unless manufacturers bring production to the US.

🚨 NEW: U.S. TO TAKE 15% CUT FROM NVIDIA & AMD AI CHIP SALES TO CHINA

Deal could net over $2B by end of 2025, with Nvidia projected to sell $15B and AMD $800M worth of chips. pic.twitter.com/J5tgPYQSSJ

— Kyle Chassé / DD🐸 (@kyle_chasse) August 11, 2025

The decision also plays into the global AI race, where regulatory power can dictate market dominance. Similar debates have been sparked by the emergence of AI-generated content tools, where governments are considering whether to tax or restrict certain technologies.

A precedent for future tech trade deals?

This deal could set the stage for a new trade model where the US allows certain exports but takes a direct share of revenue. Unlike a simple tariff, this structure creates an ongoing profit stream tied directly to sales volume,  a move that could appeal to policymakers but unsettle multinational corporations.

It also reflects a growing trend where technology companies are increasingly caught in the middle of geopolitical rivalries. From software platforms to semiconductor giants, no part of the tech world seems immune.

Even companies far from the chip industry,  like those affected by the Microsoft Lens retirement, are finding that government decisions can reshape entire product strategies.

Meanwhile, China’s own AI development continues rapidly. While export restrictions slow access to the most advanced US-made chips, domestic chipmakers are racing to fill the gap.

The downgrade of Nvidia’s and AMD’s offerings may give Chinese competitors room to grow,  but at the cost of falling behind in top-tier AI performance.

With AI’s role expanding beyond computing into areas like healthcare, security, and finance, the competition for chip supremacy is becoming as strategic as the space race once was. In some ways, it mirrors the tensions seen when GPT-5 leak reports surfaced, hinting at AI capabilities that could give one side a major advantage.

The bigger picture

Ultimately, this deal reflects a blending of trade policy and tech regulation in a way rarely seen before. By directly linking export permissions to revenue-sharing, the US is testing a new form of economic leverage in the AI era.

Whether other industries will see similar arrangements remains to be seen. But if AI chips are any indication, the era of hands-off government in high-tech global sales may be ending.