The "15%" Burden on NVIDIA and AMD - Export Controls Shift to Revenue Share

Introduction

The U.S. government has issued an export license to NVIDIA and AMD for selling AI chips to China under the unprecedented condition of contributing 15% of sales to the government—a "first-of-its-kind" agreement that has stirred the intersection of tech and geopolitics once again. Major media outlets highlight that the targets are "restricted versions" of AI accelerators like NVIDIA's H20 and AMD's MI308, emphasizing the point that this is a practical reversal (license reopening) from the tightened restrictions in April. Export controls designed under the name of national security are seen as evolving into policy tools involving a de facto revenue share.ReutersThe Washington PostFinancial Times

According to multiple reports, the U.S. Department of Commerce will reissue export licenses in exchange for a 15% contribution from AI chip sales to China. While both NVIDIA and AMD refrain from detailing specifics, emphasizing only "regulatory compliance," the framework of "licenses and contributions as a set" aligns. Additionally, NVIDIA has recently allocated $5.5 billion for inventory and adjustment costs due to regulatory tightening, and the reopening of licenses will aid the company in inventory management and channel normalization.ReutersYahoo Finance

In terms of market dependency, China is a crucial market, accounting for **approximately 13% of NVIDIA's sales (about $17 billion in FY2025) and 24% for AMD (about $6.2 billion)**. The biggest uncertainty is whether the 15% contribution will be passed on to costs and whether the U.S. government's "export tax" nature is legally sustainable.Reuters

The Legal and Policy Gray Zone

The Washington Post introduces concerns from constitutional scholars that "the U.S. Constitution prohibits 'taxation on exports'." The persistent warnings about export controls, traditionally constructed under "national security," beginning to function as fiscal and negotiation levers are strong. There is a high possibility that this will be brought to judicial review and congressional oversight.The Washington Post

On the other hand, the Financial Times points out that while this scheme could generate financial gains for the U.S. (potentially in the billions), it also risks accelerating loopholes (via third countries or smuggling) and China's pivot to domestic production. Although it might have short-term effects on inventory liquidation and performance support, in the long-term technological hegemony, it could become a counterproductive catalyst for self-sufficiency.Financial Times

Reactions on Social Media: From X, LinkedIn, and Weibo

The "15% deal" has sparked discussions on social media as well. Broadly visualized, opinions are divided into **(1) legal concern group, (2) pragmatic compromise group, and (3) Chinese opposition**.

• Legal Concern Group (X)
  Posts from policy makers and legal experts spread points such as "it's essentially an export tax" and "deviates from the core purpose of BIS." The Washington Post also reported doubts about constitutional compatibility, fueling calls for congressional and judicial involvement.The Washington Post

• Pragmatic Compromise Group (LinkedIn/X)
  Supply chain experts post that it's "the second-best under multi-layered regulations" and "a 'safety valve' for handling inventory and Chinese demand." Posts highlighting NVIDIA's significant allocation ($5.5 billion) and inventory normalization through license reopening were prominent.Yahoo Finance

• Chinese Opposition (Weibo/Official Media Commentary)
  Posts introducing comments from the Chinese Ministry of Commerce spread the phrase "Cooperation and mutual benefit is the right path," criticizing the U.S.'s "paid permission" as an unfair deal. Official media developed arguments that it "undermines the principles of free trade."weibo.comGlobal Times

• Security Community (X)
  Some former government officials and experts oppose the very approval of H20 sales to China. Concerns about the hollowing out of national security were confirmed through open letters and statements.UPI

Representative Short Quotes (Within 25 Words)
"This looks like an export tax in disguise." (Summary of posts touching on constitutional issues)The Washington Post
"合作共赢才是正道。" (Key phrase from Ministry of Commerce commentary)weibo.com

Corporate Side: Short-term "Breathing," Medium to Long-term "Gravity"

Although H20 and MI308 are "restricted versions," demand remains strong. The reopening of licenses will bring relief to inventory pressure and reactivation of channels. While NVIDIA's sales ratio to China is on a declining trend, the absolute amount remains significant, and it is likely to serve as a bridge for revenue diversification.stockdividendscreener.com

On the other hand, if the cost plus 15% is passed on to prices, the incentive for China's domestic substitution (such as Huawei AI accelerators) will further strengthen. As pointed out by the Financial Times, if "lean AI" (efficiency-focused models) and local optimization spread, the "necessity" of expensive U.S.-made GPUs may diminish.Financial Times

China's Approach: Regulation, Monitoring, and Domestic Production

Currently, there are reports of Chinese authorities strengthening "safety" inspections of foreign chips and suggesting policy operations tied to negotiations with the U.S.. On Weibo, hashtags like "H20 is a 'castrated version'" and "the U.S. creates dependence to trip us up" are increasing, and public opinion is positive towards self-sufficiency.beijingtimes.comWeibo

Market and Supply Chain Implications

• Price and Cost Structure: The 15% contribution could impact ASP increases and lead time adjustments. Especially cloud giants and research institutions may consider reorganizing their procurement.Reuters

• Third-Country Routes: Parallel distribution and regulation evasion via third countries are targets for enhanced monitoring. A decline in effectiveness could undermine the legitimacy of the system.Financial Times

• Long-term Strategic Balance: More than short-term non-tax revenue, the acceleration of China's domestic production and model efficiency could pressure the future cash flow of U.S. companies.Financial Times

What Will Happen Next (Predictions)

1. 1) Legal objections (Constitution and Trade Law) and congressional oversight will intensify within the U.S. 2) China will strengthen inspections and supervision, focusing policy resources on the spread of domestic accelerators. 3) Companies will navigate the turbulent FY2025-26 by offloading inventory and optimizing prices while redesigning the **"post-H20" strategy** with Blackwell/next-generation differentiation—such a timeline is visible.