Nvidia and AMD‘s agreement to pay the U.S. government 15% of sales from certain advanced chips to China is making tech exporters anxious they’ll also have to pay up if they want to sell sensitive products abroad.
“If a U.S. firm wants to license its models in China or provide API access there, will it face a similar government kickback?” said Daniel Castro, vice president of the Information Technology and Innovation Foundation.
Among large companies, startups and venture capital firms, there’s confusion over how the deal President Donald Trump struck with Nvidia and AMD will work and what it could mean for other exporters. These worries are particularly acute given the Constitution bans export taxes.
“It’s totally messed up,” said a top K Street official, who asked not to be named discussing the industry’s private concerns. “How is it calculated? Do deductions and credits and exemptions apply? Will it be audited?”
White House Press Secretary Karoline Leavitt said Tuesday the Trump administration is still digging into the legality and exact contours of the agreement with the two chips-makers.
The industry source also told us there’s an “Eye of Sauron” aspect in how other exporters view the administration on this issue. Firms are “worried about the eye focusing on them for deals like this or for other reasons they may not even know.”
Hill side. China hawks in Congress, meanwhile, have slammed the potential arrangement.
“Export controls are a frontline defense in protecting our national security,” Rep. John Moolenaar (R-Mich.), chair of the House Select Committee on China, said in a statement.
“We should not set a precedent that incentivizes the Government to grant licenses to sell to China technology that will enhance its AI capabilities,” Moolenaar added.
Moolenaar’s Democratic counterpart on the panel, Rep. Raja Krishnamoorthi (D-Ill.), criticized what he described as mixing national security concerns that are supposed to underlie export curbs with trade negotiations and revenue-raising.
“Our export control regime must be based on genuine security considerations, not creative taxation schemes disguised as national security policy,” Krishnamoorthi said.
