The Future Of Work: A CEO's Playbook For GenAI Transformation
Generative AI is not merely creating new opportunities; it is fundamentally reconfiguring the very fabric of value creation. For leaders who navigate this shift with strategic foresight, it promises to fuel progress and drive profound satisfaction at work. For those who don't, it presents an existential threat. The key is to move beyond generic adoption and architect a deliberate, human-centric transformation.
The most immediate transformation is not just about better personalization or proactive chatbots. It's about the shift from AI as a tool to AI as a teammate. We are moving from standardized services to hyper-personalized value delivery, from reactive interfaces to autonomous AI agents executing complex workflows, and from static job descriptions to dynamic, project-based roles where human expertise is augmented, not replaced. More broadly, the talent and skills that create value are being redefined around judgment, creativity and systems thinking.
The strategic pivot at Shutterstock offers a prescient case study. By launching its own AI image generator, Shutterstock didn't just add a feature; it began a transformation from a marketplace model to an integrated creation platform. This move aims to capture the entire value chain, from initial prompt to finished asset.
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While this democratizes creation for subscribers, it also represents a form of creative destruction for its traditional human contributors, whose work trained the very models that now compete with them. The long-term business model implications are profound: Will AI-generated content devalue the premium placed on unique human creativity, or will it elevate it? For Shutterstock and others, the decisive actions will be dictated by how they manage this delicate balance between human ingenuity and machine efficiency.
This AI-driven change heightens human potential, but the term that encapsulates its true power is Superagency. It signifies the rise of advanced, decentralized systems where individuals or small, agile teams, equipped with powerful AI agents, can wield influence and drive outcomes previously achievable only by large corporations. This is the era of the "one-person unicorn," where human-agent teaming allows for hyper-personalized value delivery at scale. Superagency thrives on leveraging technology and networks to innovate outside the confines of rigid, hierarchical structures.
Quantifying The Shift: Beyond Disruption
The challenge for CEOs is the sheer velocity of this change. The disruption is not linear; it's exponential. While early research from institutions like Brookings highlighted task disruption percentages, the current reality is more nuanced.
A study by Boston Consulting Group found that while Generative AI boosted performance on certain tasks by up to 40%, it also introduced a risk of "confident-sounding nonsense.' The challenge is no longer just task automation; it's managing the human-AI interface to ensure accuracy and quality. The industry demand is shifting from pure software engineering to roles that fuse domain expertise with AI integration capabilities—the "centaur" workforce, as coined by Garry Kasparov.
What CEOs Must Do: An Actionable Framework
To leverage AI effectively, CEOs must move from ad-hoc experimentation to a structured, enterprise-wide strategy. This map will help:
Instead of a generic audit, map your organization's core workflows (e.g., contract analysis, software development, market research, supply chain forecasting) and classify tasks into three categories: ripe for full automation, suited for AI-augmentation and requiring exclusively human judgment. This provides a granular, strategic roadmap for integration.
Go beyond simply offering courses on prompt engineering. Cultivate deep "AI literacy," which includes understanding model limitations, data bias and AI ethics. The goal isn't just upskilling; it's fostering a culture of perpetual adaptation and critical thinking in an environment where the AI is a constant collaborator.
"Retiring redundant roles" is a clinical phrase for a complex human process. Frame it as role evolution. For every role that is diminished, a new one emerges. Proactively design and define new roles like AI Trainers, Human-in-the-Loop (HITL) Managers, Prompt Librarians and AI Ethicists. These are the orchestrators who will fine-tune, manage and govern AI systems to align with business objectives.
Your investment focus must extend beyond the models themselves. It requires building a robust technical stack, including vector databases for proprietary knowledge, fine-tuning platforms and rigorous data governance frameworks. Critically, establish clear AI Usage Policies (AUPs) and an ethics review board to manage reputational, legal and operational risks. This isn't just IT; it's enterprise risk management.
To embed Generative AI, move beyond top-down mandates. Create sandboxed environments where teams can experiment safely. Launch internal challenges and "AI Champions" programs to identify and empower evangelists. This collaborative approach builds trust and transforms the workforce from passive users into active partners in the AI integration process.
Reimagine recruitment not just by using AI to screen résumés, but by using it for deep capability mapping to identify candidates with adjacent skills poised for AI-centric roles. Transform talent development by moving from one-size-fits-all training to AI-driven personalized learning paths. Use predictive analytics to identify retention risks and understand what drives engagement in an AI-augmented workplace.
Partnering with a technology integrator is no longer about outsourcing routine tasks; it's about in-sourcing intelligence. The next strategic decision is whether to leverage a partner's AI Center of Excellence (CoE) or build your own. This has a profound impact on the future of work, as your workforce must shift from focusing on task execution to guiding, interpreting and strategically leveraging AI-driven outputs. The core strategic question becomes: Do we build a proprietary foundation model on our unique data, or do we fine-tune best-in-class commercial models?
The ultimate goal is to build an organization that is not just data-driven, but judgment-driven and AI-augmented.
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She was living her life on Instagram. Then scammers turned her into a fake crypto queen.
Months ago, Ahmet Tozal took out three credit card loans and withdrew his life savings to make a fortune off crypto. The 44-year-old Turkish garment worker, who lived in Istanbul at the time, said he'd been goaded by a new friend who contacted him via a random WhatsApp message in 2023. The woman claimed she'd messaged him accidentally, but was friendly and seemed interested in Turkey, Tozal said. She told him she was a wealthy businesswoman who would soon be visiting his country on holiday. Tozal said she sent him dozens of photos of herself, a young East Asian woman traveling the world and attending prestigious conferences. He said they video-called once, for a few seconds. Eventually, she suggested he try investing in crypto. The trajectory of their relationship has the hallmarks of what global authorities call a classic pig-butchering scam, typically run by gangs in Asia. Tozal said that over several weeks, the woman convinced him to invest about 400,000 Turkish lira, or a year's worth of his wages, into a cryptocurrency called UAI Coin. It never existed. Tozal told me he lost everything. Saddled with debt and broke, Tozal moved alone to Uzbekistan to find a higher salary that could feed his family and pay off an extra 200,000 lira in loan interest. His wife and four children stayed behind in Turkey. "Whenever I think about it, it makes one almost go mad," he told me on a call from his shared apartment in Andijan. Pig-butchering, a crypto scam that started in China, is now a global crisis. It draws its name from the concept of fattening a pig before slaughter: The purveyors build a relationship with a mark over weeks or months before persuading them to give away or invest large sums. A 2024 University of Texas study estimated that $75 billion has been lost to such schemes since 2020. In 2023, the Heartland Tri-State Bank in Kansas went bankrupt after its CEO poured $47 million of company cash into a similar scam. Tozal has little chance of recovering his money, and dozens of other men say they were fooled by the same scam. Betrayed and desperate for any restitution possible, they latched onto the only lead they could find: the woman behind the screen. Who was she? Each of the men had photos and videos of her, the young East Asian woman who seemed to be living the high life, but not much else to go on. As they hunted for answers, their stories of loss and grievance would come to haunt a person thousands of miles away, a millennial trying to make a name for herself on Instagram. For months, as he was lured into the crypto trap, Tozal knew her only as Dora. Over nine months, I spoke with more than a dozen men from around the world — many in Central and West Asia — who say they've been affected by this specific pig-butchering scam. While their experiences varied, each one was tricked with the likeness of the same Asian woman. Seven of these men, including Tozal, agreed to full interviews. I verified all of their identities, and they showed me evidence of their online interactions. Several also showed me screenshots of their financial transactions. Many were unwilling to be named and said they did not report their losses to the authorities for fear of being seen as fools and damaging their reputations. Some said they'd fallen in love with their WhatsApp acquaintance; Tozal said he and Dora were strictly friends. The men come from different companies and walks of life. The common denominator? They all had jobs and thus a source of cash. Aamy Ace, a 44-year-old Indian pharmaceutical manufacturing worker, said he was cheated out of $12,000 meant for his father's cancer treatment. Another man, a 24-year-old Kazakhstani restaurant manager in Almaty named Amir, said he borrowed and lost $8,000 — 10 times his monthly salary. They remember different names. Some said they spoke to "Jasmine" for weeks, while others knew her as "Anna." Several, like Tozal, told me their contact was "Dora." The playbook for this scam is standardized. Men like Tozal would receive a cold text and slowly be persuaded to strike up a friendship or romance with the texter. All were sent photos of the same young Asian woman. "A very standard hook is an attractive person, male or female, coming in and saying: 'Oh yeah, I have a business opportunity, I'm going to come see you soon,'" said Joshua James, a cybercrime coordinator in Bangkok with the United Nations Office on Drugs and Crime. Eventually, their contacts convinced them to invest in a fake asset. Most of the men said they put their money into a faux cryptocurrency called UAI Coin. A mobile app and fake trading website lent a sheen of legitimacy to the setup. At first, the profits seemed eye-watering. Erdi Bilgiç, a 36-year-old Turkish electrician in Zonguldak, told me his initial $100 investment turned into $500 overnight in late 2023. Bilgiç, calling himself an avid investor, said he tracks stock prices and bitcoin almost daily, and felt UAI Coin's prices moved in sync with the market. He said that when he withdrew his initial gains, he received the full sum in his bank account. Emboldened, he took out a $1,500 loan at Dora's behest, gathered his life's savings of about $10,000, and put them all in UAI Coin. "She told me: 'Sell your car, sell this, sell that,'" he said. Losing it all To Tozal and Bilgiç, it seemed as though there was only one woman contacting them. But scam gangs, many based in Southeast Asia, are known to force human-trafficked victims to work in teams, sometimes with multiple people posing as the same woman in conversation with a mark. The US Institute of Peace estimated in 2024 that some 220,000 trafficked victims are involved in scams. "Judging by a lot of testimonies of survivors of human trafficking coming from scam compounds, many of them were being asked to pose as attractive young ladies," said Mina Chiang, founder of Humanity Research Consultancy, a UK-registered anti-trafficking social enterprise. To make their ploy more convincing, gangs have a woman take part in occasional video calls or voice messages. Several men in the Dora scam told me they received voice messages and forwarded them to me. A few, including Tozal, also said they had brief video calls. These tactics helped to convince them that Dora was real, they told me. Once the men's savings are invested, the critical point of the scam unfolds. The victims discover they can't withdraw their funds, and the scammers try squeezing them for more. "It is what it is. My money is gone." Tozal said he asked Dora for help and was directed to pay a tax-related fine to unlock his account. When that didn't work, he said, an engineer's fee was required. He said he knew then that he'd been fooled. The funds he lost, including his debt, are worth about $15,000 now, in a country where the average worker earns $7,300 a year. "It is what it is. My money is gone," Tozal said. Others said they've lost even more. A 50-year-old Turkish academic in Ankara said he and his wife had sold their apartment to save for a new city-center flat and dumped that money, along with $50,000 he convinced relatives to invest, into UAI Coin. He showed me a police report he made in Ankara, in which he reported losing more than $100,000 to the scam. "I asked myself, how am I going to live? I can survive, but I have a daughter in school," he said. Now, he added, he and his wife are working weekends and second jobs to make ends meet. Finding Dora In the spring of 2024, the group scamming Tozal appeared to make a mistake. As the men nursed their wounded pride, some received an email offering further help. The sender neglected to blind carbon copy each victim's email address, and the men began to contact each other. They gathered on WhatsApp groups and social media, swapping stories of how they'd been fooled by UAI Coin. Soon, they realized they'd all been talking to the same woman. Younger ones, like Bilgiç the electrician, put her photos into a reverse Google image search. They found someone. She wasn't Dora, or Jasmine, or Anna: Her name was Abe. "I can't be sure 100% it's her, but the videos and photos that we saw online were consistent," Bilgiç said. Abe is a Malaysian woman, they learned. She lives over 5,000 miles from Tozal and Bilgiç and runs a public Instagram account. Her name quickly spread among the men. To those like Tozal, it seemed like the first real step to getting their money back. But as I soon discovered, this woman wasn't the mastermind of an audacious lonelyhearts scam; she was a different kind of victim. Abe Lim was 20 minutes late when we met at a café in Kuala Lumpur's upscale shopping district. Traffic was crazy that morning. "I'm so sorry," said the 29-year-old, sheepish as we shook hands. Lim was easy to find online, and once I got in touch with her, she was keen to talk. She has some 175,000 followers on Instagram, where she posts roughly twice or thrice a week, often glamour or fashion shots of herself. Lim told me her personal brand's focus is the climate crisis. Her family, she said, runs a petrochemical business that she left to build a social media following as an environmentalist. In 2023, she ran for a local state parliament seat while campaigning on climate action, but lost. Lim's day job is running a plastics recycling company she founded in 2021. She posts photos from conferences and symposiums across Asia and the US, and snaps of herself on holiday in Bali and at Buckingham Palace. The array of photos found its way into the phones of men like Bilgiç and Tozal, who believed "Dora" was a charitable multimillionaire. Sometime in late 2023, Lim said, she started receiving online messages from these men. She thought little of it at first. "Because I've sort of put myself in the public spotlight, I felt like it was expected," she said. In early 2024, she said, the men began contacting her friends and family and claiming she'd defrauded them out of hundreds of thousands of dollars. There were rumors of self-harm or suicide. "You're like, OK, this is serious now," she said. "There were messages that said like: 'I'll fly down to kill you, track you down and make you pay for what you did.'" As the year went on, Lim was trapped in an escalating online storm. Messages flooded her inbox and Instagram comments. She said she received dozens of emails and texts a day and showed me several on her phone. Lim was all smiles in her interview, but her fatigue and frustration were palpable. "It's mentally draining," Lim said. Some heartbroken men tried to rekindle a nonexistent relationship with her; others sent threats, she said. For the first few months of 2024, she told me, she feared leaving her home in Malaysia. Lim now tries to delay her social media posts by a few days to keep her live location secret. "There were messages that said like: 'I'll fly down to kill you, track you down and make you pay for what you did,'" Lim said. The men were divided on whether Lim was "Dora" or an unwitting victim of someone pretending to be her. Some, like Bilgiç, said she clearly wasn't the woman they had chatted with. Several sent me recordings of their video calls, which showed East or Southeast Asian women holding up a hand or using a camera angle to obscure their faces. "Internet connection is not good," said a woman in one video I viewed. She was clearly not Lim. 'Should I compensate them?' As Lim and I sipped tea in Malaysia, she explained how she was grappling with a dilemma. With her personal brand living on Instagram, how much time should she spend defending her reputation and speaking out against scams? Should she stop posting? Her brand was about the climate crisis, not going to war against fraud. "I have a platform, it's not that hard for me," she said. "But do I want to be known as the person that combats this?" In February 2024, she posted several warnings about scams on Instagram. Some of the men were insisting she was liable for their losses because her images were used. "They say they know it's not you, but it's your photos anyway, so you should take some responsibility of compensating them with some amount," she said. Lim said she considered paying some of them until her family talked her out of it. "I had a lot of guilt," Lim said. "I felt like, would these allegations have appeared if I had brought this up in public earlier?" 'Who are you going to sue?' James, the UNODC cybercrime coordinator, said Lim fits the profile of a content creator whose images are farmed by scam rings. "This is actually just a third party that has nothing at all to do with anything in the scam, and they sometimes have to even suffer the legal consequences afterward. Because, who are you going to sue?" James said. For swindlers, Lim's account was perfect. She was not well-known enough for a target to recognize her, and she frequently posted photos of herself in new outfits or at public events — a wealth of content to exploit. Online footage and voice data can also be fed to an artificial intelligence algorithm to create a face filter for use in video calls, James added. In Lim's case, several victims sent me screenshots of video calls with scam workers, which appeared to feature AI-empowered deepfake face filters. When analyzing the screenshots, James said some images were highly suspicious, with tell-tale features of AI filters such as discoloration on the edges of the face and crispness around hair. He added that varying chin shapes and neck bumps in the webcam images also indicated the victims were likely called by at least two different women using deepfake filters. "I would say it is very likely the images with white are deepfakes," James said. Fraudsters, roaming free Lim said what frustrates her most is that she's reported dozens of Instagram and Facebook accounts using her name and photos. Many were not taken down. A Facebook search of her name shows her photos on a dozen accounts purported to be of women living in Los Angeles, San Francisco, and New York. Some claim to run a plastics recycling company with the same name as Lim's firm. "If you have a verified account with this face," Lim said, pointing to herself. "You shouldn't allow an account with the same photo to stay up." A spokesperson for Meta, which runs Facebook, Instagram, and WhatsApp, told me via email that it was committed to keeping its platforms safe and that it continues to "invest in detection technology and work with law enforcement to prosecute scammers." "Impersonation is against Meta's policies and we remove these accounts when they're found," the spokesperson wrote. The company said it dealt with 1 billion fake accounts on its platforms in the first quarter of this year. Meta did not comment on Lim's case specifically. Legally, Lim can't do much to compel Meta, which is headquartered in California, to take down accounts using her images, said Eric Goldman, the codirector of the High Tech Law Institute at Santa Clara University. "In the United States, Facebook may have no obligation to intervene to shut down or correct scam accounts," he said. US law protects social media firms from liability for third-party content posted on their platforms. Meanwhile, Bilgiç and other victims in Turkey have engaged local lawyers in hopes of suing whoever took their money or compelling their arrest. It'll be a long shot. "It's the general principle of criminal law. If you cannot find the person committing the crime, your hands are tied," Tarık Güleryüz, a partner at the Turkish law firm Güleryüz Partners, told me about the country's legal standards. James, the UNODC anti-cybercrime coordinator, said perpetrators know the world's law enforcement system is ill-equipped to deal with pig-butchering scams. A victim's best hope is an international coalition involving Turkey, Malaysia, and wherever the culprits are located, James said. China, a country with considerable influence in Laos and Cambodia, has performed cross-border raids there, mostly against scam rings targeting Chinese citizens. For countries like Turkey and Malaysia, nearly 5,200 miles apart, the best the men can do is hope and wait. These days, Lim is posting frequently on social media and is trying to grow her brand as an environmentalist. "All I lost was some reputation and photos. I didn't lose money, I didn't go through heartbreak with someone who didn't exist," Lim said. This year, she enrolled in a master's program for sustainable development management at Sunway University in Selangor. Tozal, who lost his life savings to "Dora," is also trying to move on. He said his wife was furious with him, and when I asked last month how their relationship was faring, Tozal said he's just trying to focus on working to support his family. He travels to see his children once every six months or so. Sitting in the kitchen of the Uzbek flat he shares with a roommate, he wondered aloud if he should blame himself. Years ago, he'd seen news reports of men falling for scams and marveled at how they could be fooled. "But when you see bits of a luxurious life coming your way, when you see the money coming into your account, inevitably you start feeling a type of way, even if you don't want to," Tozal said. He was just being human, he said. Now, he's in a foreign land, working alone. Translation by Ezgi Evrim Ozkol and Evgeniya Strygina. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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Is India committing a blunder by siding with Russia?
-- In a note this week, analysts at Bernstein questioned whether India is 'committing a blunder by siding with Russia,' warning that shifting geopolitical alignments could have 'a significant impact on the India story.' The firm stated that while the recently imposed 50% U.S. tariff on Indian goods 'is in our view the least of the country's worries,' the 'sudden shift in tone and engagement' between Washington and New Delhi is seen as more concerning. The firm stated that U.S. President Donald Trump has 'singled out India for Russian oil purchases,' prompting India to respond firmly, calling U.S. actions 'unjust and unreasonable' and openly defending its trade with Russia. Bernstein highlighted that trade talks now appear 'suspended' and that India seems 'unfazed,' even as reports circulate about Prime Minister Narendra Modi's planned visit to China and a potential visit by Russian President Vladimir Putin. Recalling recent optimism, Bernstein said that as recently as February, talk of doubling U.S.-India trade to $500 billion and reaching a deal by fall 2025 had cheered investors. But instead of reduced tariffs, India now faces '25% (then 50%) tariffs.' The analysts stressed that 'India's merchandise exports to U.S. are 18x that of Russia,' while Russian exports to India are 'fragmented' and largely energy-related. Oil discounts from Russia, they noted, are modest given the extra refining required, asking: 'Are these extra $2-3 really worth the diplomatic shift?' Bernstein concluded with a pointed question: 'Is it worth the risk to protect some industries while closing doors for all others to sell? Or it makes more sense to open up to a developed country, where export opportunities will always trump the incoming imports?' Related articles Is India committing a blunder by siding with Russia? Victoria's Secret Exposed: The Warning Sign Behind the Stock's 52% Collapse These Under-the-Radar Stocks Offer Better Risk-Reward Ratio Than Nvidia 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
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Trump's unprecedented, potentially unconstitutional deal with Nvidia and AMD, explained: Alexander Hamilton would approve
'We negotiated a little deal,' President Donald Trump told reporters on August 11, about the developing situation with leading chip makers Nvidia and AMD continuing to do business in China. He explained that he originally wanted a 20% cut of Nvidia's sales in exchange for the company obtaining export licenses to sell H20 chip to China, but he was persuaded to settle at 15%. The H20 chip is 'obsolete,' Trump added … 'he's selling a essentially old chip.' The chips do appear to be quite significant to China, considering that the Cyberspace Administration of China held discussions with Nvidia over security concerns that the H20 chips may be tracked and turned off remotely, according to a disclosure on its website. The deal, which lifted an export ban on Nvidia's H20 AI chips and AMD's MI308, and followed heated negotiations, was widely described as unusual and also still theoretical at this point, with the legal details still being ironed out by the Department of Commerce. Legal experts have questioned whether the eventual deal would constitute an unconstitutional export tax, as the U.S. Constitution prohibits duties on exports. This has come to be known as the 'export clause' of the constitution. Indeed, it's hard to find much precedent for it anywhere in the history of the U.S. government's dealings with the corporate sector. Erik Jensen, a law professor at Case Western Reserve University who has studied the history of the export clause, told Fortune he was not aware of anything like this in history. In the 1990s, he added, the Supreme Court struck down two attempted taxes on export clause grounds (cases known as IBM and U.S. Shoe). Jensen said tax practitioners were surprised that the court took up the cases: 'if only because most pay no attention to constitutional limitations, and the Court hadn't heard any export clause cases in about 70 years.' The takeaway was clear, Jensen said: 'The export clause matters.' Columbia University professor Eric Talley agreed with Jensen, telling Fortune that while the federal government has previously applied subsidies to exports, he's not aware of other historical cases imposing taxes on selected exporters. Talley also cited the export clause as the usual grounds for finding such arrangements unconstitutional. Rather than downplaying the uniqueness of the arrangement, Treasury Secretary Scott Bessent has been leaning into it. In a Bloomberg television interview, he said: 'I think you know, right now, this is unique. But now that we have the model and the beta test, why not expand it? I think we could see it in other industries over time.' Bessent and the White House insist there are 'no national security concerns,' since only less-advanced chips are being sold to China. Instead, officials have touted the deal as a creative solution to balance trade, technology, and national policy. How rare is this? The arrangement has drawn sharp reaction from business leaders, legal experts, and trade analysts. Julia Powles, director of UCLA's Institute for Technology, Law & Policy, told the Los Angeles Times: 'It ties the fate of this chip manufacturer in a very particular way to this administration, which is quite rare.' Experts warned that if replicated, this template could pressure other firms—not just tech giants—into similar arrangements with the government. Already, several unprecedented arrangements have been struck between the Trump administration and the corporate sector, ranging from the 'golden share' in U.S. Steel negotiated as part of its takeover by Japan's Nippon Steel to the federal government reportedly discussing buying a stake in chipmaker Intel. Nvidia and AMD have declined to comment on specifics. When contacted by Fortune for comment, Nvidia reiterated its statement that it follows rules the U.S. government sets for its participation in worldwide markets. 'While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide. America cannot repeat 5G and lose telecommunication leadership. America's AI tech stack can be the world's standard if we race.' The White House declined to comment about the potential deal. AMD did not respond to a request for comment. While Washington has often intervened in business—especially in times of crisis—the mechanism and magnitude of the Nvidia/AMD deal are virtually unprecedented in recent history. The federal government appears to have never previously claimed a percentage of corporate revenue from export sales as a precondition for market access. Instead, previous actions took the form of temporary nationalization, regulatory control, subsidies, or bailouts—often during war or economic emergency. Examples of this include the seizure of coal mines (1946) and steel mills (1952) during labor strikes, as well as the 2008 financial crisis bailouts, where the government took equity stakes in large corporations including two of Detroit's Big three and most of Wall Street's key banks. During World War I, the War Industries Board regulated prices, production, and business conduct for the war effort. Congress has previously created export incentives and tax-deferral strategies (such as the Domestic International Sales Corporation and Foreign Sales Corporation Acts), but these measures incentivized sales rather than directly diverting a fixed share of export revenue to the government. Legal scholars stress that such arrangements were subjected to global trade rules and later modified after international complaints. Global lack of precedent The U.S. prohibition on export taxes dates back to the birth of the nation. Case Western's Jensen has written that some delegates of the Constitutional Convention of 1787, such as New York's Alexander Hamilton, were in favor of the government being able to tax revenue sources such as imports and exports, but the 'staple states' in the southern U.S. were fiercely opposed, given their agricultural bent, especially the importance of cotton at that point. Still, many other countries currently have export taxes on the books, though they are generally imposed across all exporters, rather than as one-off arrangements that remove barriers to a specific market. And many of the nations with export taxes are developing countries who tax agricultural or resource commodities. In several cases (Uganda, Malaya, Sudan, Nigeria, Haiti, Thailand), export taxes made up 10% to 40% of total government tax revenue in the 1960s and 1970s, according to an IMF staff paper. Globally, most countries tax profits generated within their borders ('source-based corporate taxes'), but rarely as a direct percentage of export sales as a market access precondition. The standard model is taxation of locally earned profits, regardless of export destination; licensing fees and tariffs may be applied, but not usually as a fixed percent of export revenue as a pre-negotiated entry fee. Although the Nvidia/AMD deal doesn't take the usual form of a tax, Case Western's Jensen added. 'I don't see what else it could be characterized as.' It's clearly not a 'user fee,' which he said is the usual triable issue of law in export clause cases. For instance, if goods or services are being provided by the government in exchange for the charge, such as docking fees at a governmentally operated port, then that charge isn't a tax or duty and the Export Clause is irrelevant. 'I just don't see how the charges that will be levied in the chip cases could possibly be characterized in that way.' Players have been known to 'game' the different legal treatments of subsidies and taxes, Columbia's Talley added. He cited the example of a government imposing a uniform, across-the-board tax on all producers, but then providing a subsidy to sellers who sell to domestic markets. 'The net effect would be the same as a tax on exports, but indirectly.' He was unaware of this happening in the U.S. but cited several international examples including Argentina, India, and even the EU. One famous example of a canny international tax strategy was Apple's domicile in Ireland, along with so many other multinationals keeping their international profits offshore in affiliates in order to avoid paying U.S. tax, which at the time applied to all worldwide income upon repatriation. Talley said much of this went away after the 2018 tax reforms, which moved the U.S. away from a worldwide corporate tax, with some exceptions. The protection racket comparison If Trump's chip export tax is an anomaly in the annals of U.S. international trade, the deal structure has some parallels in another corner of the business world: organized crime, where 'protection rackets' have a long history. Businesses bound by such deals must pay a cut of their revenues to a criminal organization (or parallel government), effectively as the cost for being allowed to operate or to avoid harm. The China chip export tax and the protection rackets extract revenue as a condition for market access, use the threat of exclusion or punishment for non-payment, and both may be justified as 'protection' or 'guaranteed access,' but are not freely negotiated by the business. 'It certainly has the smell of a governmental shakedown in certain respects,' Columbia's Talley told Fortune, considering that the 'underlying threat was an outright export ban, which makes a 15% surcharge seem palatable by comparison.' Talley noted some nuances, such as the generally established broad statutory and constitutional support for national-security-based export bans on various goods and services sold to enumerated countries, which have been imposed with legal authority on China, North Korea, Iraq, Russia, Cuba, and others. 'From an economic perspective, a ban on an exported good is tantamount to a tax of 'infinity percent' on the good,' Talley said, meaning it effectively shuts down the export market for that good. 'Viewed in that light, a 15% levy is less (and not more) extreme than a ban.' Still, there's the matter, similar to Trump's tariff regime, of making a legal challenge to an ostensibly blatantly illegal policy actually hold up in court. 'A serious question with the chips tax,' Case Western's Jensen told Fortune, 'is who, if anyone, would have standing to challenge the tax?' In other words, it may be unconstitutional, but who's actually going to compel the federal government to obey the constitution? This story was originally featured on Sign in to access your portfolio
