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America eases AI chip curbs for China via two chip giants

By DigiconAsia Editors | Tuesday, August 12, 2025, 5:05 PM Asia/Singapore

America eases AI chip curbs for China via two chip giants

Washington loosens AI chip restrictions, insisting the move strengthens security. Experts warn of risks irreversibly triggered by historical US behaviors.

In a rare policy shift, the United States government has agreed to permit the sale of certain advanced AI chips to China, on the condition that the two chip giants involved pay 15% of all related sales revenue to the country.

The arrangement reported by the BBC and other mass media reflects a blend of economic and strategic considerations as Washington seeks to balance national security interests with the commercial stakes of its technology sector.

The deal applies to chips designed to comply with earlier export restrictions that had barred the sale of top-tier AI processors over concerns they could be used by foreign entities for military or surveillance purposes. These modified versions, though less powerful than their restricted counterparts, still hold significant value for China’s rapidly expanding AI market. Under the new framework, licensing approvals for exports will be tied to the revenue-sharing agreement, potentially generating billions of dollars for the US Treasury.

Industry sources say the government’s decision followed months of lobbying from semiconductor executives and high-level discussions in Washington. Access to the Chinese market remains critical for the American chip industry, despite ongoing geopolitical tensions and trade frictions. For the firms involved — NVIDIA and AMD — the 15% remittance will cut into margins but allow them to resume shipments to one of their largest global customer bases.

US officials argue that the arrangement maintains national security safeguards while ensuring the country benefits financially from any sales. Critics, however, warn that the policy could accelerate China’s push for technological self-reliance, prompting heavier investment in domestic chip design and manufacturing.

The agreement comes at a time when AI technology is increasingly at the center of global competition, both economically and strategically. While the revenue-sharing model is unprecedented in this sector, it could serve as a blueprint for future policies targeting sensitive technology exports. For now, the compromise enables the resumption of a lucrative trade, but with Washington taking a direct slice of the profits.

A prominent China expert, Liza Tobin, who used to serve on the US National Security Council, has likened the arrangement to “turning export licences into revenue streams,” highlighting skepticism about the deal’s national security justification and questioning how far such revenue-sharing could extend in defense-related exports. Could such sensitive revenue-sharing deals extend to future deals involving defense exports such as F-35s with commission payments, she has asked rhetorically. This comment highlights concerns about the unusual nature of this financial arrangement in export control policy and its broader implications for US trade and security strategy.

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