Scott Bessent Says Nvidia-AMD China Revenue Deal Could Serve As 'Model' For Other Industries

Treasury Secretary Scott Bessent has praised the 15% revenue-sharing agreement between the U.S. government and chip giants Nvidia Corp. NVDA and Advanced Micro Devices Inc. AMD.

Deal Structure Breaks New Ground

President Donald Trump announced on Monday that Nvidia and AMD will contribute 15% of their China chip sales to the U.S. government as part of export licensing conditions.

The agreement allows Nvidia to export H20 accelerator chips and AMD to sell MI308 processors that are designed for U.S. export control compliance to Chinese buyers seeking advanced artificial intelligence technology.

See Also: Ron DeSantis Slams ‘Suspiciously-Timed’ Congressional Stock Trades, ‘Windfall Profits:’ Says Nancy Pelosi Outperforms The Best Hedge Funds

Bessent Sees Broader Applications

In a Bloomberg Surveillance interview, Bessent called Trump’s approach a “unique solution” with expansion potential across industries.

“I think we could see it in other industries over time,” Bessent said. “Right now, this is unique, but now that we have the model and the beta test, why not expand it?”

The former hedge fund manager and George Soros protégé stated that the revenue collected would go directly toward paying down the national debt, with potential taxpayer benefits if the program succeeds.

Legal Experts Raise Concerns

The arrangement has sparked controversy among legal experts who question its precedent. Gary Hufbauer of the Peterson Institute for International Economics, according to The Hill called the deal “bizarre” and “troubling,” noting Congress had no input on the revenue-sharing condition attached to export licenses.

“Direct revenue-sharing agreements negotiated by the president and individual firms are without precedent in U.S. trade history,” Hufbauer said.

Market Impact Varies by Exposure

AMD faces greater China exposure at 24% of fiscal 2024 net sales, compared to Nvidia’s roughly 13% revenue dependence. AMD generated $7.69 billion in recent quarterly revenue, while China represents approximately $6.2 billion in annual revenue for the company versus Nvidia’s estimated $17 billion.

Read Next:

• ‘Sit In The Boat’ And Wait For 1 Or 2 Trades A Year: Larry McDonald Says Charlie Munger, David Tepper, Einhorn Follow The Same Playbook

Photo courtesy: Photo: Shutterstock