Key Facts
• August 11: NVIDIA agrees to pay 15% of H20 sales in China to U.S. government.
• H20 is a downgraded AI semiconductor designed for export under U.S. restrictions.
• April 2025: NVIDIA incurred $4.5 billion in costs due to canceled Chinese contracts.
• July 2025: U.S. reversed H20 export ban, citing competition concerns.
• AMD plans similar 15% payment for Chinese exports.
• Bloomberg warns this could be seen as an unconstitutional ‘export tax.’
• Chinese authorities claim H20 poses security risks, escalating U.S.-China tensions.
Summary
NVIDIA has reached an agreement with the U.S. government to pay 15% of its H20 semiconductor sales in China in exchange for resuming exports. The H20, a downgraded AI chip, was initially restricted under U.S. export controls due to military-use concerns. The export ban, imposed in April 2025, was reversed in July to address fears of losing market share to Chinese competitors. NVIDIA, which derives over 10% of its revenue from China, reported $4.5 billion in losses from canceled contracts during the ban. AMD is reportedly adopting a similar payment model. However, Bloomberg has raised concerns that this arrangement may violate U.S. constitutional laws by resembling an ‘export tax.’ Meanwhile, Chinese authorities have criticized the H20 for potential security risks, further straining U.S.-China relations.
