The Controversial Deal With Nvidia And AMD

Economist Peter Schiff and capital markets commentator The Kobeissi Letter have sharply criticized Nvidia Corp.’s NVDA and Advanced Micro Devices, Inc.’s AMD agreement to pay 15% of their China chip revenues to the U.S. government, calling it a “federal shakedown.”

The Controversial Deal With Nvidia And AMD

Nvidia and AMD, two of the world’s leading chipmakers, have reportedly agreed to pay 15% of their revenues from chip sales in China to the U.S. government as part of a deal to secure export licenses.

This deal, which was a condition for the companies to sell their advanced AI chips (H20 for Nvidia and MI308 for AMD) in China, has sparked controversy and drawn significant criticism from financial commentators.

See Also: Lisa Su Says AMD’s AI Chip MI355 Taking On Nvidia’s B200, GB200 Head-On As AI Customers Seek Scalable GPU Alternatives

Schiff’s Criticism: ‘Unconstitutional’ Shakedown

Schiff voiced strong opposition to the deal, labeling it as unconstitutional.

Following the publication of the news over the weekend, Schiff took to X, formerly Twitter, and argued that the payment to the U.S. government represents a “federal shakedown,” specifically criticizing the arrangement where companies pay based on revenue, not profit. 

The Kobeissi Letter: New Era Of ‘Trade Deals’

Meanwhile, the Kobeissi Letter took to X, highlighting the significant shift this deal represents. The commentator warned that this marks a new era in trade negotiations, where the Trump administration now negotiates “company-by-company” trade deals.

“Most people don’t realize how massive this announcement truly is,” The Kobeissi Letter posted. “This covers 15% of REVENUE from China, not PROFIT, for both Nvidia and AMD… The trade war just entered a new era.”

Geopolitical And Market Implications

The deal comes as the Trump administration has relaxed earlier export bans on Nvidia’s H20 chips to China, which had been imposed due to national security concerns.

Despite these concerns, Nvidia defended the arrangement, stating that it follows the rules set by the U.S. government for participation in worldwide markets.

Price Action: In the past five days, Nvidia’s stock has increased by 4.30%, while AMD has dropped 0.95%. Year-to-date, Nvidia has risen by 32.12%, and AMD has gained 43.21%, according to Benzinga Pro.

Benzinga’s Edge Stock Rankings show that Nvidia continues to demonstrate a robust upward price trend in the short, medium and long-term periods. Further performance insights can be found here.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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