Nvidia will be allowed to sell certain artificial-intelligence chips to China, in exchange for remitting 15% of the revenue they get from the sales to the U.S. government, President Donald Trump said Monday. The arrangement applies to Nvidia’s H20 chip and AMD’s MI308, both of which are designed to meet government limits on performance for chip exports to China, The Wall Street Journal reported.

Some former government officials and trade lawyers say the arrangement isn’t just unprecedented but may be illegal.

“We’re far beyond uncharted waters. We’re in an uncharted universe,” said Doug Jacobson, an international trade attorney for Jacobson Burton Kelley, who said he and his colleagues were “aghast” at the arrangement.

The State Department can charge fees for export licenses related to defense technology, but those fees aren’t based on revenue earned, Jacobson said. The Bureau of Industry and Security, which manages export controls, is also forbidden by statute from charging a fee in consideration for an export license.

“No fee may be charged with consideration of any application for a license. This could run afoul of that,” said Aiysha Hussain, a partner at law firm Mayer Brown who served as a senior advisor at the BIS between 2021 and 2024.

The White House, Commerce Department, Nvidia, and AMD didn’t respond to requests for comment.

At a press conference on Monday, Trump told reporters that he had originally wanted to receive 20% of revenue but that Nvidia CEO Jensen Huang had negotiated it down to 15%.

“If I’m going to do that, I want you to pay us as a country something,” Trump said.

Earlier on Monday, an Nvidia spokesperson told Barron’s in a statement that the company follows the rules the U.S. sets for exports and that it hopes “export control rules will let America compete in China and worldwide.”

It isn’t out of the ordinary for the president to make the final call on whether to give an export license. The Departments of Defense, State, Energy, and Commerce typically consider such applications, which start at the staff level but can be appealed all the way to the White House. Licenses are normally reviewed for national-security concerns, a process that may involve the president. In this case, whatever concerns Trump had were allayed by the revenue sharing agreement, Hussain said.

“My concern is where did the national security risk go and how does the 15% agreement solve the national security risk,” Hussain said.

Nvidia and AMD both have most of their chips fabricated in Taiwan, though the companies have begun to plan for higher chip production in the U.S. If the chips were eventually to be made domestically, putting in place a required revenue sharing deal to export them would likely be unconstitutional, Jacobson said.

The U.S. tried to charge a fee based on revenue several decades ago—a levy on goods leaving U.S. harbors—but the Supreme Court in a 9-0 decision determined that the tax violated a section of the U.S. Constitution that prohibits taxes on exports.

“There’s clearly no authority for Congress to be able to do this, let alone a president,” Jacobson said.

Among the potential plaintiffs in a case brought against the deal are Nvidia and AMD shareholders or states, whose own tax revenue might potentially be cut because the companies are sharing revenue with the federal government, Jacobson said. Nvidia and AMD are based in California.

The press office for California Gov. Gavin Newsom didn’t immediately respond to a request for comment.