Trump screwed over Nvidia’s Chinese sales, then let them happen

Hello there, world! Welcome to the first issue of Regulator, a newsletter about the collision between Big Tech and Washington. If you enjoy this, consider subscribing to get this newsletter weekly and everything The Verge has to offer.

For anyone who subscribed via our Instagram announcement: I am so, so sorry that I didn’t use the proper song to announce the launch of Regulator, which is, of course, Warren G’s “Regulate.” But I never thought that a track that samples one of my favorite Michael McDonald songs would be so perfectly applicable to the topic of this newsletter: a gun-wielding gang jumping a group of rich dudes and demanding they hand over their rings and Rolexes, or else they get popped.

On a related note: The New York Times reported this weekend that Nvidia and AMD had reached an unprecedented agreement with the Trump administration that they would pay it 15 percent of their revenue from selling microchips in China — a deal that would net the government approximately $2 billion, and is widely suspected to be the price of keeping their businesses afloat.

Back in April, after the first tariffs were announced, I worked on a Verge story with Kylie Robison about the growing panic in the AI industry. No one could say for sure if GPUs assembled in Taiwan, the world capital of microchip production, would be slammed with a massive tariff once they arrived in the US. There were several obvious reasons that this would be disastrous for chipmakers like Nvidia and AMD, which saw their respective stock prices drop precipitously that weekend: the cost of materials would rise, the price of the chip itself would go up, and there was no realistic way to move manufacturing to American shores fast enough to meet the growing and immediate demand for their GPUs. Sure, Nvidia and TSMC were planning on opening a fabricator in Arizona that would be operational later this year — but it was only one factory, and no one knows right now when it will actually begin production.

But what shocked me the most was the apparent and immediate disconnect between our sources. Silicon Valley seemed positive that President Donald Trump was going to grant them exemptions no matter what, but the lobbyists they’d hired in Washington were all melting down over the lack of clarity: semiconductors were exempt, complete mechanical assemblies were not, and which category did a GPU fall into? (The White House got back to me days after our story was published, unhelpfully stating that the executive order listed what was exempt.)

At the time, the Trump administration seemed to have no idea what it had just done to the AI industry, but it may have learned its lesson — and made it more painful to avoid compliance. Last week, during a meeting with Apple CEO Tim Cook at the White House, Trump announced that any microchip or semiconductor imported into the US would face a staggering 100 percent tariff — unless the company importing it committed to move fabrication to the US. Trump added that there would be a severe penalty for those who didn’t stick to the commitment: “If, for some reason, you say you’re building and you don’t build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that’s a guarantee.” Apple, he added, would not be affected, thanks to their $100 billion commitment to move manufacturing to America. (The gold statue Cook brought Trump sure didn’t hurt, either.)

It’s already chaotic and confusing just from a first glance: no one knows exactly what microchips are being tariffed, whether electronics that contain microchips will be tariffed, whether small businesses that can’t feasibly make microchips will be hit. But it also raises more concerning questions. If the Trump administration is really concerned about China beating the US in the AI race, why would it allow Nvidia and AMD to sell their industry-leading GPUs to China? If Nvidia and AMD are arguing that they need access to the Chinese market, why then pay 15 percent of the gross revenue of those sales to the US government?

The answer may be very simple. This is the way that Trump historically negotiates, even back in his early days as a businessman: back out of promises, leave the other party screwed, and only return to the table if the other person gives up even more than their original offer, preferably with some groveling and debasement involved. Nvidia and AMD seem to have learned this the hard and expensive way.

These kinds of dealings don’t just affect stock market darlings. The other shady Trump money-making tactic is fleecing the middle and lower-class people who’ve bought into his promises, from Trump University to the Trump Foundation — and now, the makers of Trump merch. The Verge’s very own Mia Sato has been following the Trump Organization’s recent filing of a Schedule A lawsuit against makers of unauthorized Trump merchandise, which stands out to her for three reasons: first, bootleg Trump merch is a market and culture that’s “very much part of the Trump ecosystem,” and the Trump Org has let it thrive for nearly a decade. Second, the Schedule A lawsuit is a “niche legal trend,” and it’s unclear why the Trump Org is adopting it now. Third: the beauty of a Schedule A lawsuit is that the people being sued don’t know that they’re being sued, until the money suddenly disappears from their bank accounts.

My chat with Mia is below; but first, the best of our most recent policy and political coverage…

“Trump’s endless new tariffs are threatening businesses — and you”: No one knows exactly how the new wave of tariffs will affect consumers — but Lauren Feiner’s reporting should give you a general idea of what to expect.

“Sex is getting scrubbed from the internet, but a billionaire can sell you AI nudes”: Adi Robinson’s lede about Elon Musk’s new “spicy” mode on Grok xAI is just too good. “In the fascinating new reality of the internet, teen girls can’t learn about periods on Reddit and indie artists can’t sell smutty games on Itch.io, but a military contractor will make you nonconsensual deepfakes of Taylor Swift taking her top off for $30 a month.”

“The lawyer who beat Tesla is ready for ‘round two’”: After winning an unprecedented wrongful death lawsuit against Tesla — something that has never happened in the company’s history — attorney Brett Schreiber talks to Andrew Hawkins about his next move to hold the company accountable.

“Why Donald Trump’s environmental data purge is so much worse this time”: Justine Calma tabulates exactly how many times government websites have been edited since Trump took office — and how much data about climate change has disappeared into the administration’s memory hole.

“What is Laura Loomer?” Many MAGA influencers have tried to sway Trump. Only Laura Loomer has succeeded, getting at least a dozen officials fired. After nearly a decade of covering her and the rest of the MAGA internet, I do my best to explain.

Last week, Mia Sato published an incredible feature story about the difficulties regulating the world of dupe products: protecting rightsholders’ intellectual property, preventing companies from ripping off creators, and giving merch sellers some amount of due process. She went particularly deep into the world of Schedule A lawsuits: an effective but shady way for rightsholders to enforce their designs and patents all at once, without even notifying the infringers that they are being sued. (If you prefer your longform as a podcast, here’s Mia’s Vergecast episode about it; and if you prefer video, here it is on YouTube.)

Mia’s timing could not have been better: shortly after it was published, the Trump Organization filed a Schedule A lawsuit against several companies that manufactured bootleg and dupe Trump merchandise. However, no one knows what companies are being sued — the Schedule A list of offenders are always under seal — and no one knows why the Trump Org is doing this now, 10 years after the first knockoff MAGA hats hit the market. Below, Mia and I try to figure it out.

This interview has been edited for length and clarity.

Could you explain how Schedule A lawsuits are overlapping with the dupe economy and how the Trump Organization is involved?

I keep describing Schedule A as like, this one weird trick to get things taken offline. It’s basically a way for a rightsholder to go after a ton of online storefronts all at once. They can file one federal lawsuit, and it gets its name because there’s a separate form that is filed to the court called the Schedule A sheet. And on that sheet is a list of dozens, hundreds, or even up to a thousand storefront names.

It’s unique in a couple different ways. One, you don’t need to find out people’s legal names, like you would have to if you’re filing any other lawsuit. 
You can just say SmileyGirl123 or whatever someone’s eBay username is, and go after them that way. Often, the people being sued have no idea they are being named in a lawsuit at all, until they get an email from Amazon being like, we’ve frozen all the money in your account because there’s an issue with one of your listings. Also, they get this thing called a temporary restraining order, which is supposed to only be for extraordinary circumstances, but it’s a way for sellers’ assets to be frozen, even before they’ve been found liable for infringement. So it’s a very effective way to get something for sale taken offline. It is being used by big brands like Nike. I think Roblox has done Schedule A lawsuits, and now, there’s this Trump Organization Schedule A suit.

For dupes, it’s very efficient to do a reverse-image search and find stuff that kind of looks like your product, or find your logo or your artwork, and then you just throw them all in one suit. And more often than not, the people who are being accused of infringement and being named as defendants do not get legal representation and don’t fight back.

What are the ways these are settled? 


It kind of depends. I’m gonna try not to generalize because another thing is that the Schedule A suits are really, really hard to track… I spoke with an attorney in the Chicago area named Timothy A. Duffy, who has worked on, like, 50 of these cases. And he said that there can be hundreds of defendants named, you go to court, and there’s not a single representative for any of them. It is just the plaintiff and the judge talking. So often, it ends up being some sort of default judgment, which can be hundreds of thousands of dollars, and then maybe someone who’s being accused realizes what’s happening. There was a case with the rightsholder for Grumpy Cat, who is very litigious and had filed a Schedule A suit, and the woman who was named as a defendant realized that $600 or something was missing out of her PayPal account.

One question I have is if this is connected at all to a broader Trump crackdown on IP. Within a few days of this suit being filed, there was also the Trump MAGA Instant Pot IP story. All of a sudden, the Trump Organization was not cool with that, even though plans for this slew of Trump-branded products had been announced. (Note: The price of an Instant Pot had previously been threatened by a potential Trump tariff in 2019.)

The Trump Organization could certainly file a bunch more. We don’t know who is named on this Schedule A suit. We don’t know how many defendants there are. I think those are all under seal. So, in theory, it could just endlessly file these over and over and over, scooping up new batches of online storefronts. Trumpworld is taking up this niche legal trend, and I am curious what made the Trump Organization go for this now.

Oh, yeah. Trump is notorious for filing a ton of lawsuits against anyone, for any reason. They don’t necessarily end with a judge, hearings, whatever. Normally, the threat’s enough to shake people out of doing something or even avoid doing it altogether. When I was writing at Vanity Fair, we literally had to send anything that was written about Trump to our company lawyer to be vetted. And this was before he ran for president, too. He was just that litigious.

He also would go after people for trying to make money off his name, and still does. I can only imagine that the reason he didn’t crack down on the explosion of the pro-Trump merchandise economy was that he thought: oh, this is free political advertising for me, it’s all homegrown and other people are making it. I think the bigger the target, though, the more litigious the group gets. So Joe MAGA with his Etsy shop is one thing, but Instant Pot is a pretty large company.

What makes me so curious about this lawsuit is that it feels like the DIY, dropshipper Trump merch is very much a part of the Trump ecosystem. It goes hand in hand in my mind with MAGA, period. You go to any New York City souvenir shop, and there’s Trump-themed things. So much of that culture is, like, the bedazzled Trump hats or Trump cowboy hats at events. 
Now that it’s not an election cycle, he and his people care a little bit more about consolidating control over merchandise. Maybe they loosen up when you want people to have yard signs, hats, T-shirts, and whatnot at rallies.

In the suit, the Trump Organization also specifies that it believes the sellers are all based in East Asia, which is another strange thing because these suits often go after sellers abroad. That partly explains why some of these defendants can’t get legal representation. They’re in a different country, they don’t speak the language, they don’t know an attorney in Chicago who they can hire to represent them. But the fact that the Trump Organization specified that is kind of curious.

A lot of these things are manufactured in China. Other suits often end up going after China-based sellers, who, again, are not confirmed as infringing on anyone’s IP rights. But, unfortunately, they get generalized as dupers or people making knockoffs.

I’ve joked that Washington is about six years behind the rest of the world when it comes to technology. For instance, this is a product review:

I would also like to rectify my Warren G mistake from earlier. Here is a proper link to his music video.

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See you next week!