U.S. authorities to reportedly receive 15% of revenues from AI-capable chip sales by Nvidia and AMD in China, disregarding cautions from cybersecurity experts regarding potential risks.
In a move aimed at regulating advanced chip exports and addressing national security concerns, the US government has imposed a 15% tariff on revenue from Nvidia and AMD’s chip sales in China. This decision comes as part of a new agreement that allows the export of these chips to China, but with certain conditions.
The background to this tariff can be traced back to 2025, when the US government imposed export restrictions on advanced AI chips like Nvidia’s H20, due to their capabilities in artificial intelligence and potential military applications. The Trump administration initially blocked sales of the H20 chip to China in April 2025, but this decision was reversed by August through a negotiated deal requiring chipmakers to pay the tariff.
The implications of this tariff are far-reaching. Nvidia and AMD face reduced net profits from Chinese sales due to the 15% payment to the US government, which could affect pricing strategies and competitiveness in the Chinese market. China, on the other hand, gains access to previously restricted AI chips, but at a higher cost, potentially slowing China’s development or forcing reliance on domestic alternatives.
This tariff represents a novel approach to control technology transfer and extract economic benefits while managing geopolitical risks related to the export of sensitive technology. It also signals a balancing act between maintaining trade relations and national security, which could lead to further adjustments in US export policy on emerging technologies.
The specific chips involved in the agreement are Nvidia’s H20 chips and AMD’s MI308. The tech companies Nvidia and AMD have entered an agreement with the US government to pay a 15% tariff on their chip sales in China. This agreement allows Nvidia and AMD to gain export licenses to sell semiconductors in the Chinese market.
The deal has sparked controversy, with some US politicians suggesting adding trackers to H20 chips that would render them inoperable if they ended up in China. However, others have expressed concern that the agreement might be trading away national security protections for revenue. A Commerce Department adviser for the Biden administration, Alasdair Phillips-Robins, voiced such concerns.
In 2020, Nvidia earned $17 billion in revenue from China, which accounted for 13% of its total sales, while AMD earned $6.2 billion in revenue from China, which represented 24% of its total revenue in 2024. This tariff will undoubtedly impact these figures, but the exact extent remains to be seen.
The author of this article, Jody Macgregor, has a history of writing for various gaming and music publications. His first article for PC Gamer was about the audio of Alien Isolation, published in 2015.
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This news article provides a clear and concise overview of the 15% tariff imposed on Nvidia and AMD’s chip sales in China, its background, implications, and the ongoing debate surrounding this decision.
- The new agreement allows Nvidia and AMD to sell certain chips in China, but they are required to pay a 15% tariff to the US government.
- The controversial deal has led to discussions among US politicians about adding trackers to the H20 chips, rendering them inoperable if they end up in China.
- In 2020, Nvidia earned $17 billion in revenue from China, which accounted for 13% of its total sales, and this figure could be impacted by the new tariff.
- The Noctua NF-A12x25 G2 is considered the best overall cooling fan, while the NZXT F120 RGB Duo is the best budget RGB cooling fan in the gaming world.
- This tariff is part of the US government's efforts to manage geopolitical risks related to the export of sensitive technology, particularly advanced AI chips that have potential military applications.
