US Bid for Cut of Nvidia, AMD Chip Revenue Risks 'Dangerous World'

The revenue-for-exports deal between the US government and two of the world's biggest chipmakers opens a new front in a trading regime turned upside down by US President Donald Trump.

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Nvidia and Advanced Micro Devices (AMD) agreed to pay the US government 15 percent of revenue from some chip sales to China. The chips - Nvidia's H20 AI accelerator and AMD's M1308 chips - were earlier banned by the Trump administration and require export licenses to sell.

"To call this unusual or unprecedented would be a staggering understatement," said Mr Stephen Olson, a former US trade negotiator now with the Singapore-based ISEAS - Yusof Ishak Institute. "What we are seeing is in effect the monetization of US trade policy, in which US companies must pay the US government for permission to export. If that's the case, we've entered a new and dangerous world."

The chip-payment arrangement may face legal challenges because it could be construed as an export tax, something that is not allowed under the Constitution, trade experts said.

The proposal is the latest direct government intervention in business and finance since Mr Trump returned to the Oval Office in January. As well as a chaotic tariff campaign and persistent criticism of a sitting Federal Reserve chairman, Mr Trump has used his Truth Social platform for everything from calling on chief executives to resign to offering commentary on corporate advertising campaigns.