Nvidia and AMD have agreed to pay the US government 15 percent of the revenue generated from the sale of chips to China as a condition for obtaining export licenses for the semiconductors.

Citing people familiar with the situation, the FT reported that the financial arrangement was agreed last week.

“Turmoil” at the department had initially meant export license approvals were stalled, including for Nvidia H20 and AMD MI380 chips. However, on August 8, the Commerce Department started issuing export licenses, two days after Nvidia CEO Jensen Huang met President Donald Trump.

It has not been determined what the Trump administration will do with the 15 percent share of revenue raised from the sale, the FT added.

This is the first time companies have agreed to such an arrangement with the US government in order to obtain export licenses for goods. The FT said the Department of Commerce and AMD did not respond to requests for comment, while Nvidia said: “We follow rules the US government sets for our participation in worldwide markets.”

Nvidia announced on July 14 that the Trump administration had agreed to start granting export licenses, reversing a decision made by the government in April to impose additional restrictions on exports of H20 chips to China.

At the time of the original ban, Nvidia said would cost it approximately $5.5 billion of charges associated with H20 inventory, purchase commitments, and related reserves, while AMD said on its most recent earnings call that restrictions on the sale of its Instinct MI308 accelerator to China had resulted in $800 million in costs during Q2 2024, leading to its data center segment posting an operating loss.

The reversal of the ban has caused backlash amongst some US lawmakers and national security experts, with Republican Congressman John Moolenaar, the head of a House of Representatives panel on China, writing to Commerce Secretary Howard Lutnick last month to condemn the move and request a briefing.

A group of 20 national security experts and former government officials sent a separate letter to Lutnick urging the Trump administration to reverse its decision, describing the H20 as “a potent accelerator of China’s frontier AI capabilities, not an outdated AI chip.”

Chinese state media has similarly claimed that Nvidia’s H20 chips pose a national security concern to China, with Reuters reporting that the government had previously expressed concerns over backdoor access being inserted into the semiconductors.

An article posted by a social media account associated with China’s state media said: “When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it.”

Despite this, the Chinese government still wants the US to ease export controls on HBM (high-bandwidth memory) chips, necessary for the development of AI semiconductors, as part of negotiations for a US-China trade deal.