Core Insights - NVIDIA and AMD have agreed to pay 15% of their AI chip revenue from China to the U.S. government, marking a significant shift in government intervention in tech sales [1][2] - NVIDIA's AI chip sales to China account for approximately 13% of its total revenue, equating to around $17 billion, while AMD's exposure is higher at 24%, or about $6.2 billion [2][3] - The revenue-sharing arrangement introduces uncertainty regarding future regulations and government levies, impacting both companies' profit margins and strategic decisions [2][3] Company Exposure - NVIDIA's lower dependence on the Chinese market may provide some protection against margin compression compared to AMD [2][3] - AMD's greater reliance on China necessitates a reevaluation of pricing strategies and potential diversification efforts to mitigate risks [3][4] Strategic Implications - Both companies face challenges from the revenue-sharing deal, but AMD's larger exposure places it in a more precarious position [4] - Investors should closely monitor how NVIDIA and AMD manage the balance between revenue generation and regulatory risks in the evolving geopolitical landscape [3][4]