Nvidia Vs. AMD: Who Gets Hit Harder By The 15% China Revenue Tax?

NVIDIA Corp (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD) recently agreed to pay the U.S. government 15% of their AI chip revenue from China — a groundbreaking arrangement driven by export license conditions. But not all chipmakers are equally exposed.

So, who suffers more when the government takes its cut?

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China Exposure: The Tale Of Two Titans

Nvidia's AI chips sold to China represent about 13% of its total revenue — roughly $17 billion. AMD's exposure is nearly double, with China accounting for 24% of its revenue, or about $6.2 billion.

On paper, AMD stands to lose a bigger chunk proportionally, which could put more pressure on its profit margins.

Read Also: Beijing Asks Alibaba, ByteDance Why They Need Nvidia H20 Chips Instead Of Local Alternatives

Revenue Share: More Than Just A Tax

This 15% slice isn't just a financial hit. It signals a new era of government intervention in global tech sales, adding uncertainty about future regulations. Nvidia's slightly lower China dependence might shield it somewhat, but both firms now face a precedent that could see increased government levies or expanded controls.

Strategic Implications

For Nvidia, known for premium AI chips such as the H20, this means balancing margin compression against maintaining access to a lucrative Chinese market.

AMD, with its heavier reliance on China, might need to rethink pricing or diversify more aggressively. Investors should watch how each company navigates this complex trade-off between revenue and regulatory risk.

While both Nvidia and AMD face headwinds from this China revenue-sharing deal, AMD's larger exposure means it's on riskier ground. For investors, understanding this disparity is key to gauging which chipmaker can better weather the growing storm of geopolitics and regulation.

Read Next:

• Intel’s White House Advantage: The Only Chip Giant Not Paying The China Tax

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