US semiconductor giants Nvidia and Advanced Micro Devices (AMD) have reportedly agreed to pay the US government 15 percent of their revenue from selling artificial intelligence chips to China.

Nvidia CEO Jensen Huang met with US President Donald Trump at the White House on Wednesday and agreed to give the federal government the cut from its revenues, a highly unusual arrangement in the international tech trade, according to US media outlets, including Bloomberg and the New York Times on Sunday.

Investors are betting that AI will transform the global economy, and last month Nvidia – the world's leading semiconductor producer – became the first company ever to hit US$4 trillion in market value.

The California-based firm has, however, become entangled in trade tensions between China and the United States, which are waging a heated battle for dominance to produce the chips that power AI.

The United States has been restricting which chips Nvidia can export to China on national security grounds.

Nvidia said last month that Washington had pledged to let the company sell its H20 chips to China, which are a less powerful version the tech giant specifically developed for the Chinese market. The Trump administration had not issued licences to allow Nvidia to sell the chips before the reported White House meeting.

On Friday, however, the Commerce Department started granting the licences for chip sales, the reports said.

Silicon Valley-based AMD will also pay 15 percent of revenue on Chinese sales of its MI308 chips, which it was previously barred from exporting to the country. (AFP)