Leading artificial intelligence (AI) chip companies Nvidia and AMD have agreed to pay 15% of their revenue to the U.S. government in exchange for exporting certain AI semiconductors to the Chinese market. This unprecedented arrangement, which involves corporations directly sharing profits with the government to obtain export licenses, starkly illustrates the blatant negotiation style of the Donald Trump administration.
On the 11th (local time), the Financial Times (FT) reported that Nvidia obtained export licenses on the condition of providing 15% of the revenue from its H20 chips destined for China, while AMD did the same for its MI308 chips. Previously, Jensen Huang, the chief executive officer (CEO) of Nvidia, had been in direct communication with President Trump to resolve the export ban on H20 imposed by the Trump administration. Last April, President Trump banned the export of H20 to China for national security reasons, but reversed this decision after meeting with CEO Huang in June. However, as the issuance of export licenses continued to be delayed, CEO Huang met with President Trump again on the 6th to express his concerns, and two days later, the Department of Commerce began issuing licenses in earnest. The '15% revenue sharing' became a key condition derived from this process.
Global investment bank Bernstein estimates Nvidia's H20 revenue from China this year at approximately $23 billion (about 32 trillion won). In this case, the U.S. government would secure about $3.45 billion (approximately 4.8 trillion won) from Nvidia. The Trump administration has reportedly not yet decided how to use this revenue.
Such 'revenue-sharing' export licenses are hard to find historical precedent for. Experts agree that there has been no case where U.S. corporations agreed to pay a portion of their revenue to the government to obtain a license. Kim Hyuk-jung, a deputy researcher at the Korea Institute for International Economic Policy (KIEP), noted, 'This is a mutually compensatory agreement favored by Trump, and it effectively means that the government intends to impose an export tax by converting licenses into a source of revenue for domestic corporations.' This is seen as a reflection of the trading technique similar to previous demands by President Trump for investments or job creation in the U.S. in exchange for lifting tariffs on other countries. However, Deputy Researcher Kim added, 'According to the U.S. Constitution, tax-related authority rests with Congress, and it remains questionable what legal basis the administration would have to enforce this on revenue generated overseas from H20, which is produced in Taiwan.'
Regarding President Trump's recent decision, security experts in the U.S. have raised strong criticism. Some staff members at the Department of Commerce responsible for export controls have reportedly also expressed concerns. Lisa Tobin, a former member of the National Security Council from Trump's first administration, remarked, 'As Beijing watches Washington transform export licenses into a source of revenue, will the next step be to have Lockheed Martin pay a 15% fee to sell F-35s to China?' Moreover, 20 security experts, including former National Security Deputy Assistant Matthew Pottinger, sent a letter to the Department of Commerce urging a halt to the issuance of licenses, stating, 'H20 serves as a powerful accelerator enhancing China's cutting-edge AI capabilities.'
In response, Nvidia stated, 'We follow the rules set by the U.S. government to participate in the global market,' adding that 'the U.S. must not repeat losing its leadership in the 5G (fifth-generation mobile communication) equipment market, and that U.S. AI technology must compete to become the global standard.' Previously, CEO Huang has repeatedly pointed out that U.S. regulations have allowed China's largest telecom company, Huawei, to dominate the 5G equipment market.
Trump-style transactions are expected to continue with Intel following Nvidia and AMD. Intel CEO Lipton Tan, who was pressured by President Trump last week to resign over his company's ties to China, is also scheduled to visit the White House on the same day. Deputy Researcher Kim Hyuk-jung said, 'The Trump administration prefers to exploit weaknesses to gain practical benefits from both domestic and foreign corporations,' adding that 'this agreement shows that the political costs corporations must bear are being transformed from vague risks into specific tolls that must be paid.'