Nvidia, AMD Stocks Fall. Trump Wants U.S. to Get Cut of China AI Chip Sales: Report.

Nvidia chips are the favored choice for training artificial-intelligence models. (Courtesy NVIDIA)

Nvidia stock was dropping early Monday following a report that it will give the Trump administration a portion of the sales from its artificial-intelligence chips to China.

Nvidia shares were down 1.4% at $180.23 in premarket trading. The stock rose 1.1% on Friday.

Nvidia and its smaller rival Advanced Micro Devices have both agreed to remit 15% of the revenue they generated from AI chip sales in China to the Trump administration, The Wall Street Journal reported Sunday, citing people familiar with the matter.

The unusual arrangement will apply to Nvidia’s H20 chip and AMD’s MI308, which are both designed to meet U.S. government limits on performance for chip exports to China. The Commerce Department recently began issuing licenses for shipments of both chips, according to the Journal

“We follow rules the U.S. government sets for our participation in worldwide markets. While we haven’t shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide,” a Nvidia spokesperson said in an emailed statement.

AMD and the Department of Commerce didn’t immediately respond to requests for comments early on Monday. AMD stock was down 2.6% in premarket trading.

The agreement could result in billions of dollars flowing to the government’s coffers—in May, Nvidia CEO Jensen Huang said the decision to effectively ban sales of the H20 chip had a negative revenue impact of $10.5 billion in total across Nvidia’s April and July quarters.

However, it remains to be seen whether Chinese authorities will endorse the use of American-made AI chips. Nvidia was recently asked by Chinese cybersecurity regulator to explain “backdoor security risks” associated with its chips. Nvidia has denied its chips include any backdoors.

Write to Adam Clark at adam.clark@barrons.com