Six Senate Democrats urged President Donald Trump to reconsider a deal allowing Nvidia and AMD to sell advanced AI chips to China in exchange for a 15% government revenue share.

They warned the agreement could undermine US national security and strengthen China’s military technology, citing concerns over Nvidia’s H20 and AMD’s MI308 chips.

The senators requested a detailed response from the administration by August 22.

The White House dismissed the concerns, criticizing Democrats for their past stance on similar exports.

Meanwhile, Bloomberg reported that Chinese regulators ordered local tech firms to limit Nvidia chip purchases, with some told to stop additional orders.

The Information said ByteDance, Alibaba, and Tencent were directed to pause Nvidia chip purchases pending a national security review.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Revenue-sharing model marks departure from historical blocking approach

The Trump administration’s 15% revenue-sharing deal represents a fundamental shift from how the U.S. has historically handled Chinese access to sensitive semiconductor technology.

In 2016, President Obama blocked the Chinese acquisition of Aixtron, a German semiconductor equipment maker, marking only the third time in 25 years a U.S. president had blocked a foreign investment due to national security concerns1.

Similarly, in 2018 the U.S. government moved to block sales to Fujian Jinhua Integrated Circuit Co., a Chinese semiconductor manufacturer, citing national security concerns and allegations of trade secret theft2.

This pattern of outright blocking contrasts with the current approach of allowing sales while taking a government cut, which analysts describe as moving from a “freeze-in-place” strategy to a “sliding scale” approach3.

The shift suggests the administration views controlled access with financial benefit as preferable to complete prohibition, though critics argue this commoditizes national security concerns.

2️⃣ Export control enforcement faces persistent circumvention challenges

The complexity of enforcing semiconductor restrictions helps explain why the administration may be shifting toward a revenue-sharing model rather than outright bans.

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