By Clare Duffy, Phil Mattingly, Lisa Eadicicco, CNN

New York (CNN) — Nvidia, the world’s most valuable company, has found itself caught in the middle of President Donald Trump’s historic trade war with China. The result: an extraordinary concession from a $4.5 trillion corporation that will give the United States a percentage of every high-end AI chip sold in China.

The deal, which AMD also signed for some of its chips, could split the difference between two competing Trump administration goals: maintain America’s AI dominance while securing a critical trade agreement with China. It could also give the White House billions of dollars to spend as it wishes.

What Nvidia agreed to

Nvidia and AMD have agreed to pay the US government 15% of their revenues from semiconductor sales to China in exchange for licenses to export their technology there.

The White House in April blocked the export of certain AI chips to China, including Nvidia’s H20 chips and AMD’s MI308 chips. The deal with the Trump administration allows the companies to obtain export licenses to restart sales of those chips in China, a US official told CNN. The Financial Times first reported the story Sunday.

Nvidia previewed the deal last month, when it said it would resume sales of the H20 chip to China after the Trump administration expressed openness to allowing the export of certain AI chips again. But the 15% payment was a surprise. Trump said Nvidia was initially asked to pay a 20% cut, but they negotiated the rate down to 15%.

The deal came together after Nvidia CEO Jensen Huang met with President Donald Trump on Wednesday, the official said. Although the export licenses were granted Friday, no shipments have yet been made.

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

AMD has not responded to CNN’s request for comment.

How extraordinary is this?

Governments, including the United States, have taken control of companies in the past when they were considered to be of strategic importance to national security. During the financial crisis in 2009, the United States took control of General Motors and Chrysler, and the proceeds of those stakes went directly into the US Treasury after the government sold them for a profit.

But it’s not clear that the US government has ever demanded a percentage of a company’s business without taking an equity stake – or if it’s even legal to do so.

The US Constitution forbids taxes on exports. To get around that, the deal’s terms have been structured as a voluntary agreement, so it won’t be considered a tax or a tariff, a US official said. Instead, Nvidia and AMD will voluntarily send funds to the US government. The companies will have no say whatsoever on how the US government deploys that money after it is sent.

“It’s hard to identify any historical precedent for this sort of arrangement,” said Sarah Kreps, law professor and director of the Tech Policy Institute at Cornell University’s Brooks School of Public Policy.

What about national security?

In recent years, the US government has sought to restrict China’s access to advanced American technology in an effort to slow its progress on AI and let the United States get farther ahead. But the White House’s reversal on export controls may be an acknowledgement that China is advancing in AI regardless, so American companies might as well be allowed to benefit. It could also give the White House another way to raise revenue for the US government, along with tariffs.

“It seems like there’s been some vacillation within the administration about and toward China, and I think that reflects the internal divide within the administration between the China hawks and the economic pragmatists,” Kreps said. “It seems like increasingly, the economic pragmatists are holding sway.”

That approach would align with arguments from Nvidia’s Huang, who has said that restricting sales of American AI chips is bad for US national security. Chinese developers could simply undermine US leadership by creating their own alternatives if they can’t buy American technology, according to Huang, who has met with Trump repeatedly in recent months.

The White House agrees with Huang, believing it’s better to have China locked into a US-made chip sold through legitimate channels than to force China to the black market, a US official said. China has been able to subvert existing channels to obtain restricted chips anyway.

Why is Trump charging 15%?

Big questions remain about where the 15% commission idea emerged and what it could mean for national security.

A US official said that the payment allows the administration to maintain control of the export process and bring in revenue for the US government in the process. Still, it’s not clear that the penalty for Nvidia and AMD will effectively limit the flow of the chips or erase any potential national security issues.

“If there’s a legitimate national security concern about exporting these chips to China, then I don’t see how the payments to the US government address those risks. In fact, they don’t at all,” said Scott Kennedy, senior adviser and trustee chair in Chinese business and economics at the Center for Strategic and International Studies. “And if there’s not a sufficient national security risk or they can be adequately mitigated … then the US government should just get out of the way and expect nothing in return.”

What does this mean for Nvidia?

Nvidia released the H20 chip last year as a way to maintain access to the Chinese market — which made up 13% of the company’s sales in 2024 — in the face of US export controls imposed by the Biden administration.

But the chips are widely believed to have contributed to DeepSeek, an advanced Chinese AI model that shook Silicon Valley upon its release earlier this year, raising concerns that China was further ahead on AI than previously understood.

After the Trump administration barred H20 sales to China in April, Nvidia said it took billions of dollars in charges and lost revenue because of the export controls in the first quarter and projected a similar outcome in the second quarter.

So, even if it has to fork over 15% of those sales to the White House, resuming shipments of the H20 to China could mean billions more dollars in revenue for Nvidia — which became the first publicly traded company to top $4 trillion in valuation last month. Shares of Nvidia (NVDA) rose as much as 0.5% on Monday.

Combined, Nvidia and AMD could earn as much as $35 billion in annual revenue from sales of their H20 and MI380 chips to China, according to CFRA Research analyst Angelo Zino’s estimates. That means the White House would earn around $5 billion in revenue. “We acknowledge the tax will have a negative impact on profit margins tied to China sales but view the reentry into the second-largest GPU market to be worth the cost,” Zino said in emailed commentary Monday.

How important are these chips?

Trump on Monday called Nvidia’s H20 chip “obsolete,” saying that China “already has it in a different form.”

But some experts disagree with Trump’s characterization of the chips.

“These H20s are still state of the art,” CSIS’s Kennedy said. Although they’re less advanced, in some ways, than other Nvidia chips, “they also come with elements that make them extremely sophisticated and valuable,” including their memory capabilities.

Nvidia’s H20 chip is also good at inference, says Param Singh, professor of business technologies and marketing at Carnegie Mellon University, which refers to the process an AI model goes through when answering a question.

But Nvidia’s H100 and H200 series chips, as well as its Blackwell line of chips, are much more powerful and better equipped to train large language models like OpenAI’s GPT-5 he says. It’s not the same as calling it obsolete, but using a chip like the H20 instead could mean it might take longer to train cutting edge AI models.

“There’s a huge difference in the amount of calculations that an H100 chip could do versus an H20,” he said.

Nvidia likely reasoned that there is enough Chinese demand for the chips to make the 15% commission to the White House a worthwhile trade-off for its business, according to Kreps. “You have to do a calculation based on what was lost from the export controls,” she said.

Will Trump approve more advanced chips?

Trump on Monday left open the possibility that Nvidia could export its super high-end Blackwell chips for a higher price. The Trump administration had closed the door on the export of that technology to China — even after reversing course on the H20.

However, Trump on Monday said that he’d consider allowing Nvidia to sell the Blackwell chip.

“The Blackwell is superduper advanced. I wouldn’t make a deal with that, although it’s possible,” Trump said. “I’d make a deal a somewhat enhanced in a negative way. Blackwell, in other words, take 30% to 50% off of it, but that’s the latest and the greatest in the world. Nobody has it. They won’t have it for five years.”

Trump said Huang will return to the White House in the future to discuss selling an “unenhanced” version of Blackwell.

“I think he’s coming to see me again about that, but that will be a unenhanced version of the big one,” Trump said. “You know, we will sometimes sell fighter jets to a country and we’ll give them 20% less than we have.”

What does China want?

Questions from Beijing about the security of American AI chips also raise uncertainty about just how successful Trump’s commission policy could be.

China could choose not to buy US tech firm Nvidia’s H20 chips, the social media account Yuyuan Tantian, which is affiliated with state broadcaster CCTV, said on Sunday. It claimed that the chips could have “backdoors” that impact their function and security, following previous similar claims from China’s cybersecurity administration. Nvidia has repeatedly denied that its products have backdoors.

However, that statement could be less an indication that China won’t buy American chips and more a signal to Chinese tech companies to continue innovating in semiconductors even if US shipments do resume, Kennedy said.

What does this mean for a broader trade deal?

For the Trump administration, the cost-benefit analysis is that it opens up the flow of mid-tier chips to China while giving the administration a key bargaining chip in its ongoing trade talks, a US official said.

Treasury Secretary Scott Bessent has called Nvidia export controls a “negotiating chip” in the larger US-China trade talks.

But China knows that, and its posturing over supposed security concerns with the H20 chip this weekend suggests that it won’t be won over so easily — even if it wants the chips for its market.

This story has been updated with additional information and context.

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Originally Published: August 11, 2025 at 3:19 PM PDT

KILLEEN, Texas, Aug. 11, 2025 /PRNewswire-PRWeb/ — The Undefeated Tribe, one of the fastest-growing franchise groups within the Crunch Fitness system, is doubling down on its commitment to the Killeen community with a bold expansion into a brand new 50,000-square-foot location. Locally owned and operated by franchisee Tony Hartl and The Undefeated Tribe, the new Crunch Fitness Killeen will officially open its doors at 2:00 PM on August 19, following the closure of the current gym the night before at 10:00 PM.

The new location, representing a $10 million investment, is located just next door from the original club at 1101 S Fort Hood Street, in the former Conn’s and next to Area 254. Originally opened in 2018 with 28,000 sq. ft., Crunch Killeen is now expanding to nearly double the size, bringing an even more vibrant and upscale experience to its members.

The expanded club will feature hot yoga, full-service locker rooms with saunas, a second indoor turf space, more strength training and cardio equipment, a Kid’s Crunch Theatre, group fitness and Ride spin studios, HIITZone™ functional training, HydroMassage®, red light therapy, tanning, babysitting services, personal training, and more.

“We are so excited to bring a new Crunch Fitness brand to Killeen and continue to offer outstanding and affordable fitness,” said Crunch Franchisee Tony Hartl. “We appreciate and value all of our members at Killeen, especially those who have been with us since day one—this new location will offer a vibrant, upscale and new experience for the community.”

To celebrate the opening, Crunch will host a Grand Re-Opening Celebration on Monday, August 19, from 5:00 PM – 7:00 PM, where the first 1,000 guests will receive a free Crunch t-shirt (while supplies last). Attendees will also have the opportunity to meet football legend Vince Young, who will be available for photos and autographs (limit 2 per person). The event is free and open to the public, no membership required.

In addition, Crunch is offering a limited-time exclusive where new members can join for just 1¢, get their first month free, and receive a complimentary one-hour personal training session.

Crunch Killeen is also hiring. Positions include managers, group fitness instructors, personal trainers, customer service representatives, facility technicians, and babysitters. Those looking to join a team that’s passionate about people, fitness, and fun can apply now at epiccrunchjobs.com.

Founded in 2018 by Tony Hartl, The Undefeated Tribe was named Crunch Franchise of the Year in 2021 for its excellence in performance, brand leadership, and community impact. With 33 locations open and over 47 in development, the team is on a mission to open over 100 new clubs nationwide by the end of 2028.

About The Undefeated Tribe

Founded in 2018 by Tony Hartl, The Undefeated Tribe is one of the fastest growing franchises within the Crunch Fitness system. The Company currently operates locations in Texas, Missouri, New Mexico and Oklahoma, with many more in development. In 2021 The Undefeated Tribe was selected as the Franchise of the Year for the Crunch Fitness system. The Undefeated Tribe was recognized as the top-performing franchise for its unique accomplishments and excellence in business performance, community service, and brand involvement.

Media Contact

Amber Givens, The Undefeated Tribe, 1 2706685354, [email protected], epicrunchjobs.com

SOURCE The Undefeated Tribe