Nvidia and AMD have made a groundbreaking agreement to allocate 15% of their revenue from chip sales in China to the US government, a deal aimed at securing a semiconductor export license. The Financial Times reported on Sunday.

This revenue-sharing initiative includes Nvidia’s H20 chips and AMD’s Mi308 chips, with details emerging from US officials indicating that the Trump administration is yet to determine the allocation of these funds.

An anonymous official stated that the chipmakers consented to this Quid Pro Quo arrangement as a prerequisite for obtaining a Chinese export license last week.

According to export management specialists, this marks the first time US companies have agreed to a revenue-sharing model in exchange for export licenses, as reported by the newspaper. Donald Trump has reportedly encouraged these firms to invest in the US to “offset” the tariffs imposed.

In a statement to Reuters, an Nvidia spokesperson mentioned, “We haven’t shipped H20 to China for months, but we are optimistic that export control regulations will enable us to compete globally.”

AMD did not provide an immediate response to inquiries for comment.

Last week, the US Department of Commerce commenced the issuance of licenses to NVIDIA for the export of H20 chips to China, removing a significant barrier to entering key markets.

In July, the US overturned an earlier ban on the sale of H20 chips to China. Nvidia had specifically modified its microprocessors for the Chinese market to align with the Biden administration’s AI chip export regulations.

Nvidia’s chips are pivotal in driving the current AI surge, and the company became the first to surpass a market valuation of $4 trillion in July.

However, Nvidia faces growing scrutiny from Chinese regulatory bodies, with challenges likely to persist. Recently, China’s Cyberspace Watchdog summoned Nvidia to clarify concerns regarding a potential “backdoor” security risk that might grant remote access or control over the chip. Nvidia refuted these claims.

Nonetheless, concerns have been echoed in Chinese state media. Earlier this month, it was reported that officials stated Nvidia needs to furnish “persuasive security proofs” to assuage worries over security risks for Chinese users and regain trust in the market. Additionally, the WeChat national media account highlighted potential security risks posed by the H20 chip, suggesting the possibility of “remote shutdown” features via a hardware “backdoor.” Nvidia has yet to respond to these allegations.

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