The revenue-sharing arrangement not only undermines national security by turning export controls into a profit center, but also unbalances the traditional relationship between government and business. This precedent, which essentially sells national security for corporate profits in exactly the wrong domain, could encourage China to pressure for more concessions on sensitive technologies like semiconductor manufacturing tools.

The unusual move underscores the importance of the Chinese market for U.S. chipmakers. Nvidia was forced to cut prices to compete with Huawei's more advanced Ascend chip. Despite U.S. chip bans, China's AI sector continues to thrive, with leaders like Baidu and Huawei driving innovation. The real constraint on Nvidia's sales in China isn't a lack of demand — it's U.S. sanctions that prevent broader adoption of its full-performance chips.