Nvidia strikes $3 billion revenue-sharing deal with Trump administration to resume AI chip sales in China

Nvidia made a special deal with the Trump administration to keep selling chips to China. The deal means Nvidia will share up to $3 billion in revenue with the US government this fiscal year to sell its H20 chips in China.

President Trump confirmed the deal on Monday, saying he granted export licenses to Nvidia in exchange for 15% of the China sales revenue. Trump called Nvidia CEO Jensen Huang “a brilliant guy” during the announcement.

Nvidia and AMD face criticism over China deal

Reports from multiple media outlets, including the Financial Times and Washington Post, said Nvidia and AMD made similar deals with Trump, citing unnamed sources. Some trade experts called the deal “blackmail” and said it might violate the US Constitution’s ban on export taxes, as per the report by Washington Post.


Nvidia did not officially confirm the deal but said they follow US government rules and hope export controls allow them to compete in China and worldwide. Nvidia and AMD shares dropped slightly on Monday after the news. China is very important to Nvidia, making up 13% of its revenue last fiscal year, as stated by Yahoo Finance.

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China’s chip market and Nvidia’s challenges

Nvidia has tried selling lower-power chips to China due to tighter US export controls for national security reasons. Nvidia launched its H20 chips (based on Hopper technology) in 2024. In April, the Trump administration unexpectedly banned Nvidia from exporting H20 chips to China, causing Nvidia to lose billions and its stock to fall sharply. The export ban was lifted in July, but US lawmakers still worry about China’s AI development.

Wall Street expects Nvidia to recover $15 billion in lost sales in the second half of the year, reaching about $20 billion total revenue from China for fiscal year 2026. If the revenue reaches $20 billion, the US government could earn $3 billion from the deal (15% of sales).

Analyst Stacy Rasgon from Bernstein said it’s better for Nvidia and AMD to sell AI chips to China than to let Chinese companies like Huawei take over the AI market, as per the Yahoo Finance report.

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Huawei is a big Chinese tech company making chips to compete with Nvidia’s H20 chips. Nvidia says US export controls might help Chinese rivals like Huawei to grow stronger. Currently, the revenue-sharing deal covers only Nvidia’s H20 chips. (Trump’s comment).In July, Nvidia also released new chips with its latest Blackwell architecture for the Chinese market.

Analyst Rasgon expects China to start buying these new Blackwell-based chips from Nvidia as export rules allow. However, analyst Gil Luria from DA Davidson warns the deal could push China to rely more on domestic chipmakers like Huawei. Luria says China might not want to buy from US companies if they have to share money with the US government, according to the report by Yahoo Finance.

FAQs

Q1. Why did Nvidia make a deal with the US government for China chip sales?
Nvidia made the deal to get permission to sell its H20 AI chips to China while sharing part of the revenue with the US government.

Q2. How much money will the US government earn from Nvidia’s China sales?
The US government could earn up to $3 billion from Nvidia’s revenue-sharing deal based on 15% of the China sales.