WASHINGTON, D.C.: Nvidia and AMD have agreed to give the U.S. government 15 percent of revenue from sales to China of certain advanced chips used in artificial intelligence, including Nvidia's H20, a U.S. official told Reuters.

The arrangement follows months of export restrictions. The Trump administration halted H20 sales to China in April, but last month, Nvidia said it had been told it could resume shipments. On Friday, a U.S. official confirmed the Commerce Department had begun issuing export licenses.

According to the Financial Times, which first reported the deal, the revenue-sharing agreement was a condition for obtaining licenses to sell semiconductors such as Nvidia's H20 and AMD's MI308. The Trump administration has not yet decided how the proceeds will be used.

When asked about the 15 percent payment, Nvidia said, "We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide." AMD did not respond to a request for comment.

China is a significant market for both companies. In its last fiscal year, Nvidia earned US$17 billion from China, 13 percent of total revenue, while AMD reported $6.2 billion from China in 2024, representing 24 percent of sales.

The U.S. official stressed that the administration does not view the sale of H20 or equivalent chips as a national security risk. Commerce Secretary Howard Lutnick has described the H20 as Nvidia's "fourth-best chip" and said allowing sales supports U.S. interests by keeping Chinese firms reliant on American technology, even if the most advanced products remain banned.

Still, the move drew criticism from some policy experts. "Either selling H20 chips to China is a national security risk, in which case we shouldn't be doing it to begin with, or it's not… in which case, why are we putting this extra penalty on the sale?" said Geoff Gertz, a senior fellow at the Center for New American Security.

Alasdair Phillips-Robins, a former Commerce Department adviser under President Joe Biden, argued the arrangement could undercut security concerns. "If this reporting is accurate, it suggests the administration is trading away national security protections for revenue for the Treasury," he said.

China's foreign ministry did not immediately comment. The U.S. official said details on when and how the payments will be implemented remain undecided, but the administration will comply with the law.