Former President Donald Trump has proposed a new framework allowing Nvidia's H200 AI chips to be sold in China, contingent on the U.S. government receiving a 25% revenue share. The plan, reportedly welcomed by Chinese leadership, marks a potential breakthrough in U.S.-China tech trade tensions.
- U.S. government would receive 25% revenue share from Nvidia H200 chip sales in China.
- H200 is a high-performance AI chip designed for advanced machine learning and data center applications.
- Nvidia (NVDA) and AMD are central to the proposed revenue-sharing framework.
- Chinese leadership reportedly responded positively to the proposal.
- Potential annual U.S. revenue from the deal could exceed $2 billion.
- Implementation depends on approval from U.S. regulatory and legislative bodies.
A new proposal under former President Donald Trump's administration could pave the way for the resumption of sales of Nvidia's H200 AI chips in China, a move previously restricted due to national security concerns. Under the plan, the U.S. government would receive a 25% cut of all revenue generated from H200 sales in China, a significant increase from the 15% revenue-sharing agreement reportedly discussed earlier this year between Nvidia and AMD with the U.S. federal government. The H200, designed for high-performance artificial intelligence workloads, is among the most advanced semiconductor products currently available, with performance capabilities far surpassing prior generations. The proposal, which leverages a novel financial mechanism to align national security interests with economic incentives, reflects a broader strategic shift in U.S. export policy. By capturing a direct stake in China-bound chip sales, the federal government could offset national security risks while generating substantial revenue—potentially exceeding $2 billion annually if H200 sales reach projected volumes in the Chinese market. The reported positive response from Chinese leadership adds credibility to the possibility of implementation, particularly if the agreement includes safeguards on end-use and technology transfer. Stocks in semiconductor firms, especially Nvidia (NVDA) and AMD, are likely to react sharply if the deal is finalized. The H200 chip is expected to drive significant demand in China's AI infrastructure, cloud computing, and autonomous systems sectors. A reopening of this market could boost NVDA’s revenue in Asia by up to 35% over two years, while AMD may benefit from expanded licensing and co-development opportunities. However, the agreement faces legislative and regulatory hurdles, including scrutiny from Congress and export control agencies.