What are the potential long‑term implications for U.S.‑China tech relations and future export restrictions on these companies?

Long‑term U.S.–China tech dynamics

The 15 % revenue‑share arrangement signals a shift from ad‑hoc tariffs to a more structural, “tax‑on‑sales” regime that can be tightened at any time. For investors, the key implication is that the U.S. is moving toward a permanent, “license‑and‑revenue‑share” model for high‑performance chips, turning the current export‑control list into a dynamic revenue‑capture tool. As the technology frontier (AI accelerators, data‑center GPUs, and high‑bandwidth memory) remains heavily China‑focused, this creates a “regulatory cost of capital” for any U.S. semiconductor firm that sells into China. The cost is not just the 15 % fee; it also adds compliance risk, potential supply‑chain disruptions, and a higher probability of future restrictions on next‑generation nodes (e.g., 3‑nm, 2‑nm, or chip‑package‑level security features). Over the next 12‑24 months we can expect a gradual decoupling: Chinese firms will accelerate domestic alternatives (e.g., Huawei’s Kunpeng and Ascend, and state‑backed chipfoundries), while U.S. firms will see a shrinking addressable market in China, roughly 10‑15 % of global GPU revenue today. That will compress the top‑line growth rates for NVIDIA (NVDA) and AMD (AMD) in their earnings guidance and force them to price‑adjust for the higher “tax” on China sales, which could erode profit margins by 2‑3 pts per year.

Trading implications and technical outlook

Both NVDA and AMD remain in strong up‑trends on the broader AI‑driven rally, but their price charts are now reflecting a widening risk‑premium. NVDA is trading near its 2024‑2025 high‑growth channel (≈ $770‑$800) with a key resistance at $795; a break above with volume would keep the bullish momentum alive, but a close below $720 (the 200‑day SMA) would trigger a corrective swing toward $650‑$670, reflecting investor concern over escalating export costs. AMD’s price is perched just below its 50‑day EMA (≈ $115) and above a strong support line at $103; a breach below $103 could trigger a 10‑% pull‑back to $85‑$90 as investors price in a higher “China‑tax” drag on earnings.

Actionable insights

1. Short‑term risk management – Allocate a modest protective put (e.g., NVDA 1‑month 15% OTM) or a vertical spread to hedge against a sudden regulatory announcement or a dip below the technical supports (NVDA $720, AMD $103).
   
2. Fundamental watch – Track quarterly guidance on China revenue; a ≥5 % YoY decline or a revision upward on the 15 % fee will be a catalyst for price movement.
   
3. Long‑term positioning – Consider diversifying into non‑China‑exposed high‑margin AI/semiconductor peers (e.g., ASML, Broadcom) or Chinese‑listed semiconductor firms that are likely to benefit from the decoupling (e.g., SMIC). The spread between U.S. chips (with a cost‑of‑sale penalty) and domestic Chinese alternatives should widen, providing relative‑value opportunities if you can tolerate geopolitical risk.
   

Overall, the 15 % revenue‑share is a signal of a more permanent “tax‑and‑license” regime that will compress margins, increase compliance costs, and accelerate the U.S.–China tech split. The market has already priced some of the risk; further deterioration in policy will punish NVDA and AMD if they fail to diversify or absorb the extra cost, while the broader AI sector may still find support in the global AI‑computing demand, making relative‑value trades across the semiconductor ecosystem more compelling.