Is Trump’s deal with 2 chipmakers legal?

National security concerns also raised as Nvidia, AMD agree to pay U.S. 15% of revenue from sales to China

- By QUEENIE WONG

PRESIDENT Trump shakes hands with Nvidia CEO Jensen Huang during a White House event in April.

President Trump struck an unusual deal with Nvidia and Advanced Micro Devices that allows the companies to sell certain chips to China in exchange for giving the U.S. government a 15% cut of those sales.

But the unprecedented agreement also has raised concerns from politicians and legal experts over whether the deal is legal and would pose a national security threat.

Questions also linger about exactly how the deal, which was announced Monday, would work because the Constitution bars taxes on exports, although some experts said Trump could find a workaround.

The U.S. government might receive $3 billion from the revenue split if China’s demand for Nvidia’s H20 chip — which is less powerful than the company’s highest-end artificial intelligence chip — reaches $20 billion, according to a note from Bernstein Research.

“It ties the fate of this chip manufacturer in a very particular way to this administration that is quite rare,” said Julia Powles, a professor and executive director of the UCLA Institute for Technology, Law & Policy.

Trump’s agreement with the world’s most valuable company could put pressure on other tech companies and major exporters to strike similar deals with the U.S. government, but it’s still unclear what the implications will be internationally, she said.