National Security Risk or Revenue Generator: NVDA–AMD Saga Continues

As the trade war between the United States and China continues to evolve, a new and unusual development has emerged—one that could set a precedent for how companies secure U.S. government approval to conduct international trade: paying the government for access to foreign markets.

According to the Financial Times and other outlets, Nvidia (NVDA) and Advanced Micro Devices (AMD) have agreed to pay the U.S. government 15% of their China chip sales in exchange for export licenses. This arrangement applies to China-specific products, including Nvidia’s H20 and AMD’s MI308. Such a “cost of doing business” model is unprecedented in the modern U.S. marketplace and could encourage other companies seeking to operate in China—or any other foreign market—to negotiate similar agreements.

In the short term, the impact on Nvidia and AMD may be manageable, but over time, both companies could raise prices on their AI chips to offset the 15% revenue reduction. For context, Nvidia’s sales to China have totaled roughly $17 billion. Notably, Nvidia has already reduced its forward guidance for China revenue due to uncertainty surrounding export policy. While the stock has experienced modest selling pressure in early trading, the company has been preparing for volatility in its China sales outlook.

This development represents more than a one-off trade concession—it could redefine the relationship between U.S. companies, government regulators, and global markets. Whether it’s viewed as a safeguard for national security or a new revenue stream for the government, the precedent set by Nvidia and AMD may well influence the future of international trade policy.