NVIDIA and AMD Strike 15% Deal with US Government: A New Phase in the US-China AI Chip War and the Future of Corporate Strategy
In August 2025, an unprecedented deal was reported in both the semiconductor industry and international politics.
US AI chip giants NVIDIA and AMD have reached an agreement to obtain export licenses for specific AI chips to China in exchange for paying 15% of their sales revenue to the US government.
This goes beyond a simple commercial transaction, encompassing issues at the core of the US-China technological hegemony struggle, national security, corporate strategy, and international trade rules.
This article provides a multi-faceted analysis of the background, impact, and future developments of this deal.
1. Overview of the Deal: Gaining Access to the Chinese Market for a '15% Fee'
1-1. Contents of the Agreement
According to Bloomberg reports, NVIDIA and AMD have reached an agreement to be permitted to export AI chips (such as the H20) to China by paying 15% of their sales revenue to the US government.
President Trump himself acknowledged the deal at the White House, stating that he initially sought 20% but settled on 15% after negotiations.
Interestingly, Trump emphasized that the 'H20 is an older model and China already possesses similar chips,' providing a rationale to mitigate national security concerns.
1-2. Export Licenses as an Exception
Traditionally, the US has strictly restricted the export of advanced AI chips to China.
This agreement serves as an 'exception' to those regulations, opening a path for companies to reclaim massive market opportunities.
2. Background: The US-China AI and Semiconductor Hegemony Struggle
2-1. History of Tightened Export Controls
Since 2022, the US has gradually tightened export controls on advanced GPUs and semiconductor manufacturing equipment due to concerns over China's military and surveillance applications.
In particular, NVIDIA's A100/H100 series were in high demand in the Chinese market, and the tightened regulations had impacted corporate performance.
2-2. China's Development of Alternative Technologies
Meanwhile, within China, Huawei and Semiconductor Manufacturing International Corporation (SMIC) are rapidly advancing the development of domestic AI chips.
NVIDIA CEO Jensen Huang has sounded the alarm, stating, 'If you stop exports, China will enter the global market with its own technology.'
3. Legal and Institutional Issues
3-1. Constitutional Constraints
Article 1, Section 9 of the US Constitution prohibits taxes on interstate commerce or goods from specific regions, and it has been pointed out that this 15% levy could potentially be classified as an 'export tax'.
However, companies are unlikely to mount a legal challenge to avoid the risk of losing their licenses.
3-2. Concerns Over the Expansion of the 'Pay-to-Play' Model
This case could be said to have set a precedent where the government turns export permits into a 'revenue source'.
Among economic analysts, there is growing concern that 'this could spread to other sectors.'
4. Impact on Corporate Strategy
4-1. NVIDIA and AMD's Profit and Loss Calculations
NVIDIA's China-related revenue is in the billions of dollars annually, and AMD also holds a market worth billions.
While the 15% levy will squeeze profit margins, it is highly likely they determined it was a better strategy than being completely excluded from the Chinese market.
Wall Street analysts estimate that even after the 15% levy, NVIDIA is expected to maintain a gross margin of approximately 60% on its China sales.
4-2. Intel's Position
Intel CEO Lip-Bu Tan is scheduled to meet with Mr. Trump, with the challenge being to coordinate policies regarding the expansion of semiconductor manufacturing within the US.
The company has already been pointed out as having excess manufacturing capacity, leaving it caught between political pressure and investor demands.
5. Geopolitical Implications
5-1. The 'Transactional' Phase of US-China Relations
Experts describe this move as 'highly transactional diplomacy'.
It is hard to deny the impression that short-term economic interests have been prioritized over national security, which could undermine policy consistency in the long term.
5-2. China's Retaliatory Cards
China still holds significant economic leverage, such as export controls on rare earth elements and the suspension of supply for critical materials.
There remains ample room for them to take retaliatory measures in response to the tightening of US regulations.
6. Future Scenarios
6-1. Short-term Impact
NVIDIA and AMD stock prices rose following the announcement of the deal
Some uncertainty has been resolved, improving investor sentiment
However, the risk of declining profit margins remains
6-2. Long-term Outlook
Competition in the Chinese market under technical constraints will intensify
The possibility that Chinese companies' domestic AI chips will narrow the performance gap
The risk of US policy becoming more hardline again
7. Expert Comments and Evaluation
Geopolitical strategist Reva points this out.
This agreement steps into uncharted territory.
In the short term, it favors US companies, but in the long term, it could accelerate China's self-reliance and threaten US technological dominance.
Wall Street's reaction is divided, with some praising it as gaining market access, while others express concern that it sets a dangerous precedent.
Conclusion
The '15% deal' between NVIDIA, AMD, and the US government is more than just corporate news; it has become a symbolic case study for a new phase in the US-China technology war.
Companies are being forced to make strategic decisions between regulations and markets, while the government is searching for a balance between national security and economic interests.
The outcome could impact not only the semiconductor industry but the entire international order.