Democratic senators have formally challenged President Trump’s plan to collect a 15% fee from Nvidia and AMD’s AI chip exports to China, arguing the arrangement violates federal law and potentially the Constitution. The bipartisan pushback highlights growing tensions over balancing national security concerns with commercial interests in the lucrative AI semiconductor market.
What you should know: Six Democratic senators sent a letter to Trump on Friday demanding he reverse his decision to allow the chip exports with the fee structure.
- The lawmakers include Mark Warner of Virginia, Chuck Schumer of New York, Jack Reed of Rhode Island, Jeanne Shaheen of New Hampshire, Chris Coons of Delaware, and Elizabeth Warren of Massachusetts.
- They argue the 15% cut violates US export law, which prohibits the federal government from charging fees for processing export licenses or authorizations.
- The Constitution’s Section 9 states that “No Tax or Duty shall be laid on Articles exported from any State,” which the senators suggest makes Trump’s plan unconstitutional.
The arrangement details: Trump confirmed on Monday that the US had “negotiated a little deal” with Nvidia, a leading AI chip manufacturer, to permit exports of the H20 GPU to China.
- The president described the H20 chip as “obsolete,” though Democratic senators disagree with this characterization.
- White House Press Secretary Karoline Leavitt indicated similar deals could extend to other companies in the future.
- The Commerce Department is still working through the “legalities” and “mechanics” of the arrangement.
National security concerns: The senators emphasized that allowing AI chip exports to China undermines US strategic interests.
- “These sales to a leading adversary run counter to US national security interests,” the lawmakers wrote in their letter.
- They expressed alarm at the administration’s “willingness 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.”
What they’re demanding: The letter requests specific details about the implementation and oversight of the fee arrangement.
- The senators want to know how the US will collect payments from Nvidia and AMD.
- They’re seeking information about who was behind negotiating the deal.
- The lawmakers are asking how the collected funds will be used.
Company responses: Neither Nvidia nor AMD immediately responded to requests for comment about the legal challenges.
- The Commerce Department previously stated it would “consider any H20 license applications carefully, accounting for both the benefits and the costs of potential exports from America.”
- The department said it would consider “the views of experts across the US government” in making decisions.
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