*

Agreement applies to advanced AI chips like Nvidia's ( NVDA ) H20

*

Nvidia ( NVDA ) spokesperson says company follows rules set by US

government

*

US official says administration does not feel sale of

chips

compromises national security

(Changes sourcing in headline and paragraph 1 to U.S. official,

rewrites throughout)

By Karen Freifeld

Aug 10 (Reuters) - Nvidia ( NVDA ) and AMD have

agreed to give the U.S. government 15% of revenue from sales to

China of advanced computer chips like Nvidia's ( NVDA ) H20 that are used

for artificial intelligence applications, a U.S. official told

Reuters on Sunday.

U.S. President Donald Trump's administration halted sales of

H20 chips to China in April, but Nvidia ( NVDA ) last month announced the

U.S. said that it would allow the company to resume sales and it

hoped to start deliveries soon.

Another U.S. official said on Friday that the Commerce

Department had begun issuing licenses for the sale of H20 chips

to China.

When asked if Nvidia ( NVDA ) had agreed to pay 15% of revenues to

the U.S., a Nvidia ( NVDA ) spokesperson said in a statement, "We follow

rules the U.S. government sets for our participation in

worldwide markets."

The spokesperson added: "While we haven't shipped H20 to

China for months, we hope export control rules will let America

compete in China and worldwide."

AMD did not respond to a request for comment on the news,

which was first reported by the Financial Times earlier on

Sunday. The U.S. Department of Commerce did not immediately

respond to a request for comment.

The Financial Times said the chipmakers agreed to the

arrangement as a condition for obtaining the export licences for

their semiconductors, including AMD's MI308 chips. The report

said the Trump administration had yet to determine how to use

the money.

"It's wild," said Geoff Gertz, a senior fellow at Center for

New American Security, an independent think tank in Washington,

D.C.

"Either selling H20 chips to China is a national security

risk, in which case we shouldn't be doing it to begin with, or

it's not a national security risk, in which case, why are we

putting this extra penalty on the sale?"

U.S. Commerce Secretary Howard Lutnick said last month the

planned resumption of sales of the AI chips was part of U.S.

negotiations with China to get rare earths and described the H20

as Nvidia's ( NVDA ) "fourth-best chip" in an interview with CNBC.

Lutnick said it was in U.S. interests to have Chinese

companies using American technology, even if the most advanced

was prohibited from export, so they continued to use an American

"tech stack."

The U.S. official said the Trump administration did not feel

the sale of H20 and equivalent chips was compromising U.S.

national security. The official did not know when the agreement

would be implemented or exactly how, but said the administration

would be in compliance with the law.

Alasdair Phillips-Robins, who served as an adviser at the

Commerce Department during former President Joe Biden's

administration, criticized the move.

"If this reporting is accurate, it suggests the

administration is trading away national security protections for

revenue for the Treasury," Phillips-Robins said.