Donald Trump has just invented a new form of corporate taxation that will reshape global commerce. His deal, forcing Nvidia and AMD to surrender 15 per cent of their China chip sales revenue to the US government, establishes the precedent for governments to claim ownership stakes in private companies' foreign earnings through export license leverage.

According to the terms of the agreement, Nvidia will pay Washington 15 per cent of revenue from its H20 AI accelerator sales in China, while AMD surrenders the same percentage from its MI308 chip sales. Both companies receive export licenses allowing them to serve Chinese markets with chips designed to comply with US restrictions. Trump originally demanded 20 percent but settled for 15 percent after negotiations.

The principle of this deal is revolutionary, as the US government has declared that American companies' access to foreign markets constitutes a privilege that must be purchased through ongoing revenue sharing rather than one-time licensing fees.

This transforms export controls from security measures into profit-sharing mechanisms that scale with business success. The financial impact on Nvidia could reach $1.2-1.8 billion annually if China represents 15-20 per cent of its estimated $8-12 billion data center revenue, while AMD's smaller exposure might cost $200-400 million yearly. These numbers pale beside the precedent being established, which transforms regulatory compliance from binary approval into continuous government partnership.

The implications extend far beyond semiconductors because export controls affect virtually every technology sector. Microsoft's Office 365 sales in China, Boeing's aircraft exports to restricted countries, and Tesla's China manufacturing operations all depend on licenses that could theoretically require similar revenue-sharing arrangements under this precedent.

The international response will prove more significant than the domestic implications. The European Union, which collected just $469 million through France's digital services tax in 2023, now has a template for claiming revenue shares rather than imposing traditional corporate taxes. Brussels could demand 15 per cent of American companies' European revenue in exchange for data transfer licenses or market access permits. Furthermore, China has announced plans to investigate the arrangement under anti-monopoly laws, but the real threat comes from reciprocal measures. Beijing could demand similar revenue sharing from American companies operating in China, creating a global system where governments routinely claim ownership stakes in international business operations.

The semiconductor industry provided ideal testing conditions for this approach. Nvidia and AMD face limited alternatives to Chinese market access while depending on Taiwan Semiconductor Manufacturing Company for production, creating multiple leverage points. The national security implications of AI chips provide political cover for aggressive government intervention that might face stronger resistance in other sectors. However, the model's success will encourage its application wherever similar dynamics exist. Pharmaceutical companies dependent on FDA approvals for global market access, defense contractors requiring export licenses for foreign sales, and technology firms needing government cooperation for international operations all face potential revenue-sharing demands.

This arrangement reveals Trump's broader strategy for funding government operations without traditional tax increases. Rather than raising corporate tax rates across the board, the administration can selectively target companies with significant foreign revenue streams and regulatory dependencies, generating substantial revenue while avoiding conventional tax policy complications. Constitutionally, the deal remains uncertain because no court has examined whether the government can condition export licenses on revenue sharing. The Commerce Department's broad authority over export controls provides legal cover, but the arrangement resembles taxation without legislative approval, potentially violating requirements for congressional authorization of government revenue collection. International trade law presents additional complications because revenue-sharing arrangements could violate World Trade Organization rules against discriminatory practices. The national security justification for semiconductor export controls provides potential protection, but the WTO's enforcement mechanisms remain too weak to challenge major powers effectively.

The most significant consequence involves precedent for other governments. If the United States can claim 15 per cent of American companies' foreign revenue through export license leverage, other nations will demand similar arrangements for foreign companies operating within their borders. France could require revenue sharing for data processing licenses, while Germany might demand similar arrangements for automotive technology exports. Companies that have built global operations, assuming regulatory compliance, now face ongoing government partnership requirements, which represent a one-time cost. The shift from traditional corporate taxation toward government profit participation in private enterprise represents a fundamental change in how international business operates.

The Nvidia deal marks the beginning of a new model for government-corporate relationships that will spread across industries and borders. Companies with significant international operations should prepare for similar revenue-sharing demands as governments worldwide recognize the profit potential of regulatory leverage. Export licenses have become subscription services rather than one-time approvals, with governments claiming permanent stakes in the businesses they regulate.

This development transforms international commerce from a system based on regulatory compliance into one requiring ongoing government profit participation, fundamentally altering the relationship between private enterprise and state authority in ways that will define global business for decades.