China reportedly urged domestic companies to avoid using Nvidia (NVDA) H20 processors, especially for government work, after Nvidia and AMD (AMD) agreed to pay the US 15% of the revenue for certain chip sales to China.

Nvidia and AMD have agreed to pay the US government 15% of their revenues from semiconductor sales to China in exchange for export licenses, an unprecedented quid pro quo arrangement aimed at solidifying America’s AI business dominance while maintaining trade ties with China.

Beijing has urged local companies to avoid using Nvidia Corp.’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s attempts to recoup billions in lost China revenue after the Trump administration reversed an effective US ban on such sales.