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Posted August 12, 2025 at 10:45 am
Nvidia and AMD struck a first-of-its-kind deal: they get to do business in China, so long as the US government gets a taste.
America’s chip export restrictions are designed to keep the country’s most advanced tech out of Chinese rivals’ hands. But stateside chipmakers would – obviously – rather sell their wares to whoever it is that’s willing to pay. So Nvidia and AMD cut a deal with the US government: in exchange for permission to sell chips in China, they’ll hand the States 15% of the revenue they make. That could be some paycheck: analysts believe Nvidia alone could pull in $23 billion from China this year.
For markets: Pay by the rules.
Nvidia and AMD may be giving up a significant share of their sales (and, therefore, their profit), but that’s better than being locked out of the world’s second-biggest economy altogether. And hey, they’ll probably manage to make up the difference – either by hiking up Chinese prices on existing products, or creating new product lines with fatter profit margins. Investors, take note. Fractured trade relationships have long been a risk to company earnings and share prices, but this deal shows that it’s now possible to pay to play. The precedent is clear: politics can be written directly into a firm’s revenue model.
The bigger picture: Get your spectacles out.
Market access becoming a paid privilege will change how global tech companies turn sales into profit. And once you factor in licensing fees, tariffs, and revenue-sharing deals, a shareholder’s portion could look a lot smaller. In this new era, where politics can hold its hand out first, the smartest investors will need to read the fine print. So watch out for new licensing terms, check if products or regions are affected by restrictions or deals, and keep an eye out for any sudden profit margin changes.
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Originally Posted August 11, 2025 – Nvidia And AMD Struck A Deal With The US Government To Do Business In China
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