President Donald Trump announced a significant shift in U.S. technology export policy Monday, permitting U.S. semiconductor manufacturers—including industry leader Nvidia—to sell specific high-performance AI chips to approved Chinese customers, contingent upon remitting a quarter of the revenue generated from those sales to the U.S. government. The new framework, aiming to balance national security concerns with economic competitiveness, will apply broadly to American firms like Advanced Micro Devices (AMD) and Intel, according to a social media statement from the President.
New Export Policy Balances Commerce and Security
The directive, revealed this week, centers on allowing the sale of certain high-demand artificial intelligence hardware, specifically citing Nvidia’s H200 chip. This component is a high-end accelerator but does not represent the manufacturer’s most advanced, cutting-edge technology. Under the policy, companies must secure approval from the Department of Commerce for specific Chinese clients, ensuring the chips do not contribute to military advancements deemed critical to U.S. defense interests.
Writing on his Truth Social platform, President Trump framed the controversial move as economically beneficial, asserting that the policy would “support American jobs, strengthen U.S. manufacturing, and benefit American taxpayers.” The Department of Commerce is concurrently finalizing the operational details required for implementation.
The key condition mandates that 25% of the gross proceeds from eligible chip sales in China and other specified markets must be paid directly to the U.S. Treasury. This revenue-sharing agreement dramatically raises the financial cost previously discussed by industry sources. Earlier reports indicated that in August, both Nvidia and AMD had agreed internally to a lower 15% revenue share with the U.S. government for comparable chip sales in China, suggesting a sharp escalation in required contribution under the new presidential mandate.
Industry Leaders Welcome Clarity
Nvidia, the dominant global supplier of specialized AI processors, quickly offered public support for the administration’s decision. A company spokesperson lauded the policy for enabling the American chip industry to remain competitive and support “high-paying jobs and manufacturing in America.”
The representative described the mechanism—allowing commercially oriented, pre-approved Chinese customers access to the H200—as a thoughtful compromise. This model effectively distinguishes between military and civilian applications, providing American firms access to a crucial international market while ensuring the U.S. government derives substantive financial returns.
Implications for the Semiconductor Market
The implementation of this 25% revenue-sharing model establishes a complicated new precedent in U.S. export controls, fundamentally changing how American technology companies can access the vast Chinese market.
Key Impacts of the New Framework:
- Financial Cost: The 25% revenue cut will significantly reduce profit margins for U.S. chipmakers on approved sales in China, potentially influencing pricing strategies and investment decisions.
- Market Segmentation: The policy solidifies the strategy of offering sophisticated, yet not top-tier, AI chips to the Chinese market, while reserving the most powerful processors for domestic and fully aligned allies.
- Operational Complexity: American companies must establish robust compliance systems to accurately track eligible sales and remit the required portion of revenue, adding substantial administrative overhead.
This policy reflects a pragmatic shift toward managed trade regarding sensitive technology, prioritizing clear financial returns to the U.S. government while maintaining industrial leadership. Going forward, industry analysts will closely monitor the compliance costs and the competitive response from Chinese domestic semiconductor firms, who may capitalize on the new financial burdens placed on their U.S. counterparts.