Tuesday, September 30, 2025

US Wants 15% Cut On AI Chip Sales To China In Exchange For License

Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) have reportedly agreed to remit 15% of revenue from China AI-chip sales to the US government in exchange for export licenses—an unprecedented revenue-sharing requirement that reshapes the rules of US–China tech trade. The arrangement covers Nvidia’s H20 and comparable AMD parts destined for China.

The Commerce Department has begun issuing licenses for H20 shipments after months of uncertainty. A US official said the administration believes the sales do not compromise national security, while Nvidia reiterated only that it follows US rules.

However, critics are arguing that the Constitution forbids taxes on exports. Others cast it as a “government-enforced royalty,” warning it normalizes company-by-company trade pacts.

Meanwhile, Mark Cuban praised the move sarcastically as a template: “In the future, don’t call it a tax, call it a Commission for America.”

Whether the 15% cut stands up in court may hinge on how it’s characterized. The Supreme Court has struck down ad valorem charges on exports that function like taxes, most notably the Harbor Maintenance Tax in United States v. US Shoe in 1998. The key distinction in that and related cases: a lawful “user fee” must closely match a specific government service, but a revenue-based levy generally does not.

For investors, the math is plain even before the lawyers weigh in. A 15% skim off gross sales, not profit, is material to any China volume that returns under the new licensing regime. The FT estimates Washington’s take could run into the billions annually if shipments scale, though long-term demand is not assured.

Chinese authorities have already urged local firms to avoid Nvidia’s H20 amid security claims, a signal that political pushback could blunt volumes or raise substitution risk.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Silver Still At 90:1, What If It Snaps Back To 15:1? | Glenn Jessome – Silver Tiger

Why This Gold Run Could Be Bigger | Roger Rosmus – Goliath Resources

Majors Don’t Want to Be Left Out of This Gold Run | Mike Bennett – Altamira Gold Corp

Recommended

Nord Precious Metals Conducts Geophysical Survey At Castle To Identify Historical Workings

Anfield Energy Releases First Assay Results From JD-7 Mine Drill Program

Related News

Nvidia Q3 Earnings: Are We Nearing A Top?

Folks, we just may be nearing a market top if Nvidia (NASDAQ: NVDA) is any...

Sunday, November 24, 2024, 09:37:00 AM

Nvidia’s Revenue Soars 122% in Q2 2025 Amid AI Boom

Nvidia (NASDAQ: NVDA), the semiconductor giant at the forefront of the AI revolution, has once...

Thursday, August 29, 2024, 07:31:00 AM

Nvidia Takes $15B Hit as China Chip Restrictions Test US Tech Strategy

The escalating technology rivalry between the United States and China has dealt a severe blow...

Tuesday, May 20, 2025, 07:33:23 AM

NVIDIA Director Offloads $235M Worth of Shares

NVIDIA (Nasdaq: NVDA) has seen huge insider selling activity recently. Tench Coxe, a long-time director...

Wednesday, September 25, 2024, 08:45:00 AM

Nvidia: BMO Raises Price Target To $750

Nvidia Corp (NASDAQ: NVDA) reported their fiscal third-quarter earnings on May 26th after market close....

Friday, May 28, 2021, 11:36:00 AM