Several top Senate Democrats are urging President Trump to walk back a deal with Nvidia and AMD that would allow the companies to sell artificial intelligence (AI) chips to China after they agreed to share 15 percent of revenue from sales.
Senate Minority Leader Chuck Schumer (D-N.Y.) and Democratic Sens. Mark Warner (Va.), Jack Reed (R.I.), Jeanne Shaheen (N.H.), Chris Coons (Del.) and Elizabeth Warren (Mass.) argued in a letter sent Friday that the move runs counter to U.S. national security interests and could violate the law.
Warner is the vice chair of the Senate Intelligence Committee, while Reed, Shaheen and Warren are the top Democrats on the Senate Armed Services, Foreign Relations and Banking panels, respectively.
“This ‘negotiated deal,’ allowing American semiconductor manufacturers to pay a 15 percent fee for the ability to sell critically sensitive technology to our adversary, blatantly violates the purpose of export control laws,” they wrote.
Nvidia and AMD have each agreed to share 15 percent of revenue from the sales of their H20 and MI308 chips in order to secure export licenses from the Trump administration, which had imposed new licensing restrictions effectively blocking sales earlier this year.
The deal has raised legal questions, as federal law prohibits fees on export licenses, while the Constitution bars export taxes. However, it’s unclear whether the agreement would be considered a formal fee or tax and whether anyone would challenge the move.
It has also provoked national security concerns, as the U.S. seeks to outpace China on AI and prevent Beijing from using the technology to boost its military capabilities.
“Our national security and military readiness relies upon American innovators inventing and producing the best technology in the world, and in maintaining that qualitative advantage in sensitive domains,” the senators said. “The United States has historically been successful in maintaining and building that advantage because of, in part, our ability to deny adversaries access to those technologies.”
“The willingness displayed in this arrangement to ‘negotiate’ away America’s competitive edge that is key to our national security in exchange for what is, in effect, a commission on a sale of AI-enabling technology to our main global competitor, is cause for serious alarm,” they added.
An Nvidia spokesperson pushed back on these concerns, arguing its H20 chip “would not enhance anyone’s military capabilities, but would have helped America attract the support of developers worldwide and win the AI race.”
“Banning the H20 cost American taxpayers billions of dollars, without any benefit,” they said in a statement.
The Democratic lawmakers pressed Trump for information about who participated in the negotiations, what legal standards were applied, how the 15 percent will be determined and collected, what the funds will be used for and what other companies are under consideration for such a deal.
White House press secretary Karoline Leavitt suggested last week that the administration could pursue similar agreements in the future, even as the legality and mechanics of the Nvidia and AMD deal are “still being ironed out” by the Commerce Department.
“Right now, it stands with these two companies. Perhaps it could expand in the future to other companies,” she said. “I think it’s a creative idea and solution.”
This story was updated at 12:13 p.m.
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