Democratic Lawmakers Urge Trump to Scrap Chip Export Revenue-Sharing Deal
Citing national security and legal concerns, seven Democratic lawmakers called on the Trump administration Aug. 15 to reverse its decision to allow Nvidia and AMD to sell certain controlled computing chips to China in exchange for a portion of their sales revenue.
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In a letter to President Donald Trump that is copied to Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, House Select Committee on China ranking member Raja Krishnamoorthi, D-Ill., said that one of those chips, the Nvidia H20, has “superior memory bandwidth compared to any chip” China currently makes, and provides “cutting-edge capability" for running an AI system.
"For the United States to remain a global leader in AI and emerging technologies, we must not incentivize granting licenses for technology exports that strengthen China's AI capabilities or treat our national security tools as bargaining chips," he wrote.
Krishnamoorthi is also concerned the administration is considering allowing Nvidia to sell China a 30%-50% reduced-performance version of its most advanced AI chip, the GB300 Blackwell, in exchange for a slice of the revenue. With the Blackwell having about 25 times the computing power of the H20, China could build the “largest AI supercomputers in the world” if it obtained enough diminished Blackwell chips, he said.
“Allowing even downgraded versions of cutting-edge AI hardware to flow to [China] risks accelerating Beijing’s capabilities and eroding our technological edge,” he wrote.
In a separate letter to Trump, six Senate Democrats, including Senate Minority Leader Chuck Schumer, D-N.Y., said they’re concerned the Nvidia-AMD deal could strengthen China's military capabilities, including hypersonics, communications, surveillance and battlefield decision-making.
"The United States has historically been successful in maintaining and building [its technological] advantage because of, in part, our ability to deny adversaries access to those technologies," the senators wrote. "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."
Krishnamoorthi said that requiring payment for chips sales to China violates the Constitution, which prohibits placing taxes or duties on exports, and the Export Control Reform Act, which bars charging fees for export licenses. The senators raised similar concerns.
Krishnamoorthi asked Trump to answer several questions by Aug. 22, including what legal authority the administration is using to require payment for export licenses, and how revenue collected from such deals would be allocated, managed and overseen. The letter builds on a statement Krishnamoorthi issued Aug. 11 after the revenue-sharing part of the Nvidia-AMD arrangement became public (see 2508110044).
The Senate letter seeks answers to its own set of questions by Aug. 22, including whether other companies are under consideration for similar deals. Besides Schumer, the letter is signed by Banking Committee ranking member Elizabeth Warren, D-Mass., Foreign Relations Committee ranking member Jeanne Shaheen, D-N.H., and Sens. Chris Coons, D-Del., Jack Reed, D-R.I., and Mark Warner, D-Va.
White House spokesperson Kush Desai questioned the sincerity of the Democratic lawmakers. “It’s quite rich to see Democrats, who were totally MIA when Joe Biden’s autopen administration let H20 chips and other advanced technologies freely flow to China, now pretend to care about our national and economic security," Desai said in an e-mailed statement.
Some Republican lawmakers also have expressed reservations about the deal. Rep. Rob Wittman, R-Va., said he worries the Chinese government could force the U.S. chipmakers to turn over their intellectual property, which China would then copy.
“I always have concerns about when the United States has a lead in technology, for us to not do everything we can to protect that lead in technology, and I think in this particular instance, I would prefer that we keep that lead,” Wittman told Export Compliance DailyAug. 15. “I understand both sides of the argument. My concern is that China will use this to their advantage, and they are not trustworthy in any usage of this technology.”
Trump has called the H20 an “obsolete chip” that Nvidia should be allowed to sell to China. He has said the U.S. deserves to be paid for easing export restrictions on Nvidia and AMD.