Once you open the door to transactional licensing, it’s almost impossible to close it. – Nigel Green, CEO of global financial advisory deVere Group
NEW DELHI (India CSR): Nvidia and AMD have agreed to give the US government 15% of their China AI chip revenues in exchange for export licences – a never-before-seen move that the CEO of global financial advisory deVere Group, says risks recasting export controls as financial transactions and undermining the foundations of global trade.
The arrangement covers Nvidia’s H20 and AMD’s MI308 semiconductors, both tailored for the Chinese market after earlier restrictions.
It follows a meeting between Nvidia chief executive Jensen Huang and US President Donald Trump, with the Commerce Department’s Bureau of Industry and Security beginning to issue licences two days later.
“This is the first time in US history that access to export licences has been monetized in this way,” says Nigel Green.
“Export controls are meant to protect national security, not to serve as revenue-sharing schemes.”
“The moment you convert them into commission deals, you change their purpose entirely – and send a destabilizing message to global markets.”
Nvidia could sell 1.5 million H20 chips in China in 2025, generating around $23 billion. For AMD, China remains a major growth driver, with the market accounting for roughly a quarter of its total revenue last year.
The 15% deal would divert billions into the US Treasury – but at a cost, says Nigel Green.
“This isn’t just a one-off commercial arrangement,” he notes.
“It could act as a template. If the US, the world’s largest economy, can charge companies for permission to export, other governments will take note.
“We could quickly see an environment where market access is auctioned off, dictated by political leverage rather than clear, consistent rules. This is the opposite of what global business needs.”
The policy shift came after the Trump administration in April moved to ban the H20 outright. The ban was reversed in June, but no licences were issued until the revenue-sharing agreement emerged.
Some US security officials warn the chips could boost China’s artificial intelligence capabilities in ways that might indirectly support its military. Supporters argue the deal keeps US companies competitive in a key market while funding national priorities.
Nigel Green argues that mixing these objectives corrodes the credibility of trade policy:
“Export controls work when they are grounded in consistent, technical criteria. When they are applied based on a company’s willingness to pay, they become bargaining chips. That undermines their legitimacy and erodes trust among allies and investors.”
The deal comes as Washington and Beijing hold sensitive trade talks, with China pressing for looser controls on high-bandwidth memory chips – another critical AI component. If revenue-linked licensing becomes a norm, Nigel Green warns, it could spark tit-for-tat measures worldwide.
“Other countries will use this precedent to justify their own pay-to-play trade restrictions,” he says.
“That would make international supply chains less predictable, raise costs, and force companies to build costly redundancy into operations. Ultimately, it could accelerate the shift of investment and R&D away from the US.”
Investors prize predictability in policy. When the rules change unpredictably or become negotiable for a fee, companies will adapt defensively. This may include shifting production, diversifying export markets, or avoiding deep exposure to the US regulatory environment altogether.
“Businesses thrive on certainty,” affirms the deVere CEO.
“If they start factoring in the risk that tomorrow’s policy will come with a new price tag, it will change capital allocation decisions. That’s not good for innovation, competitiveness, or the market as a whole.”
Nigel Green concludes that the long-term risk is systemic. “Once you open the door to transactional licensing, it’s almost impossible to close it. This isn’t just about semiconductors or one country.
“It’s about whether the US – and by extension the global trading system – can maintain rules that are applied transparently, not traded for revenue.
“Without that, trust will unravel, and markets will respond.”
(India CSR)
