President Donald Trump has recently greenlit Nvidia Corp (NASDAQ: NVDA) to resume selling its chips to China on the condition that it’ll share 15% of China revenue with the US government.
However, the US representative for Virginia’s 8th congressional district, Don Beyer, warns the deal may backfire – it’s “a major mistake” that violates the Constitution as well, he told CNBC today.
Nvidia stock has been a lucrative investment over the past four months. At the time of writing, it’s up roughly 90% versus its year-to-date low in the first week of April.
Why is allowing Nvidia to remain in business with China a mistake?
According to Rep Don Beyer, letting Nvidia sell “really good chips” to China is a strategic blunder.
“We’re in a competition with China – and yet, we’re helping them,” he noted, pointing to the risk of strengthening a geopolitical rival that’s already not far behind in terms of AI capabilities.
Beyer also argued that the 15% revenue-sharing arrangement violates the US Constitution, which prohibits export taxes.
While technically framed as a licensing condition, critics – including trade lawyers and national security experts – say the deal functions as a de facto export tax, setting a dangerous precedent for monetising national security policy.
US tech setting up data centres in Middle East is also a bad idea
On Tuesday, Rep. Don Beyer also raised alarms on US tech enabling data center expansion in non-democratic Middle Eastern countries.
“It’s one thing to have all the data in a democracy, but in a non-democracy, who knows what that data will be used for,” he said on Squawk Box. The lawmaker’s concern centres on surveillance, censorship, and authoritarian control.
With AI infrastructure increasingly reliant on cloud and data center architecture – exporting such capabilities to regimes with opaque governance could empower digital repression.
Beyer’s comments reflect a growing unease about tech diplomacy without democratic safeguards.
Does the world need more oversight and regulations for AI
All in all, Beyer’s message was a call for guardrails. He cited experts like Dario Amodei, the chief executive of Anthropic, who recently warned that AI could eliminate as much as half of the entry-level white-collar jobs within the next five years.
But the deeper concern, according to the US Representative, is existential since “we have no idea how to align artificial superintelligence values with our values.”
He urged proactive regulation and international engagement, including with Beijing, to prevent runaway AI development. “It doesn’t mean we stop, but it does mean we start to think about guardrails,” he concluded.
Does that mean you should sell Nvidia stock?
Despite the US lawmaker’s warning, AI stocks have done exceptionally well in recent months, and Wall Street believes space leaders like Nvidia shares will continue to rip higher moving forward.
According to The Wall Street Journal, the consensus rating on NVDA stock remains at “buy” with price targets going as high as $250, indicating potential upside of another 40% from here.
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