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Dow Jones NewsAug 10, 9:59 PM UTC
MW Nvidia and AMD reportedly will give U.S. government 15% of its China chip revenues
By Mike Murphy
AMD and Nvidia reportedly have obtained semiconductor export licenses for China, with an unprecedented condition.
Nvidia Corp. and Advanced Micro Devices Inc. will give 15% of their chip revenue from sales in China to the U.S. government as a condition of receiving new export licenses, according to a report Sunday.
The Financial Times reported that Nvidia (NVDA) and AMD (AMD) obtained U.S. export licenses for the Chinese market last week for its H20 and MI308 artificial-intelligence chips, respectively, on the condition of an unprecedented revenue-sharing agreement. The FT said no U.S. company has ever agreed to split revenue with the government as a condition of obtaining an export license.
In emailed comments Sunday, an Nvidia spokesperson neither confirmed nor denied the report. "We follow rules the U.S. government sets for our participation in worldwide markets," the spokesperson said. "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 immediately respond to a request for comment.
Earlier Sunday, Reuters reported that an article affiliated with Chinese state media said that Nvidia's H20 chip - which Nvidia built specifically for the Chinese market to avoid U.S. export restrictions on advanced AI chips - poses a security risk, claiming the chips could be remotely shut down via a "backdoor."
Nvidia denied the claim, saying in an emailed statement Sunday: "Cybersecurity is critically important to us. Nvidia does not have 'backdoors' in our chips that would give anyone a remote way to access or control them." A separate Nvidia blog post written last week said using "backdoors" or "kill switches" would "would undermine global digital infrastructure and fracture trust in U.S. technology."
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The Chinese market is key for both companies. While Nvidia does not expect to see meaningful revenue from H20 sales in China until later this year, they could be a significant boost to its earnings next fiscal year, analysts have said.
AMD's outlook currently does not include MI308 shipments to China, but Melius Research analysts recently said AMD could eventually earn $3 billion in recurring quarterly revenue from China sales.
-Mike Murphy
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08-10-25 1759ET
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