U.S. Treasury Secretary Scott Bessent has proposed a novel revenue-sharing agreement, initially established with semiconductor giants Nvidia and AMD, as a potential framework for other industries. This approach, revealed on August 13, 2025, allows these companies to continue selling specific AI chips to China, with a stipulated 15% of the generated revenue being remitted to the U.S. government.
The initiative is designed to bolster U.S. revenue streams and address fiscal challenges, including the national debt. Secretary Bessent attributed the genesis of this arrangement to President Donald Trump, characterizing it as a unique solution that permits Nvidia's continued market presence in China while channeling financial benefits back to the U.S. Treasury. The revenue collected is earmarked for debt reduction, with the potential for broader economic stimulus. This model has been described as a "beta test" for future export deals, with Bessent suggesting its applicability across various sectors over time. While the specific chips involved are described as less advanced, the broader implication is the potential for the U.S. to leverage national security concerns as a basis for financial concessions from corporations, shifting from purely prohibitive export controls to a more transactional approach.
The arrangement has drawn both praise and scrutiny. Critics have raised concerns about the potential for such deals to blur the lines between national security and revenue generation, questioning the legality and the precedent it sets. Some experts have labeled the approach as "economic extortion" and a departure from traditional export control policies. Economically, the 15% revenue tax on AI chip sales to China is noted to impact Nvidia's and AMD's profit margins, potentially lowering their price-to-earnings ratios and factoring geopolitical risk into their valuations. This move also occurs within a broader context of U.S.-China trade tensions, which have led to disruptions in global supply chains and a push for technological self-reliance in China. The effectiveness and long-term implications of this model for international trade and technological competition are subjects of ongoing discussion and analysis.