The proposal by U.S. President Donald Trump to license Nvidia to sell some of its more advanced artificial intelligence chips to China is causing concerns among the most vocal China hawks in Washington, including members of his own party.
This pushback has escalated this week with the U.S. House of Representatives Foreign Affairs Committee developing a bill that could enhance congressional control over AI chip exportation.
The proposal, also referred to as the AI Overwatch Act, was introduced last month by Rep. Brian Mast, R-Fla., the committee chairman. That would involve the House Foreign Affairs Committee and Senate Banking Committee approving any shipment license of advanced chips within 30 days, and giving authority to the lawmakers to block sales by joint resolution.
The bill follows the Trump Administration’s intention to license Nvidia to sell its H200 chips to China, which are much more powerful than the processors it previously allowed to be exported.
Since its legislation into law, the AI Overwatch Act would cancel current licenses on such AI chip transfers and temporarily ban the same until the administration presents a national security strategy on AI exports.
It has exemptions for U.S.-controlled and trusted companies that would be shipping the chips to foreign countries, as long as they comply with security standards.
Chairman Mast, framing it as a national security risk, said, “Companies like Nvidia are requesting to sell millions of advanced AI chips, which are the cutting edge of warfare, to Chinese military companies like Alibaba and Tencent.”
Republican Chairman of the Select Committee on China, Rep. John Moolenaar, R-Mich., also called it a “critical step toward protecting America’s technological edge.” However, it is not clear how much support the AI Overwatch Act can receive in the House and the Senate.
It can be expected that the act will be a cornerstone of a bigger conflict that is brewing in Washington between legislators who view the Nvidia chip exports as a matter of national security and those who claim that the exports are beneficial to sustain U.S. technological leadership.
Among the latter camp is White House AI and crypto czar David Sacks, who has already criticized the AI Overwatch Act. The Silicon Valley entrepreneur and investor recently reposted a viral social media post that the bill would indicate Trump’s authority over AI chip exports.
Sacks and Trump administration officials backing further Nvidia shipments abroad have contended that U.S. chip export restrictions have served as a self-defeating gesture and have given away market share to Chinese competitors.
Therefore, they state this push is beneficial, that U.S-designed chips should be at the core of the world’s AI infrastructure. It is in line with the claims of Nvidia CEO Jensen Huang and lobbyists of the industry.
However, the bipartisan legislators have claimed that the Nvidia H200s might improve the Chinese AI capacity and may be used by its military.
The existing U.S. chip controls also mandate that any export or transfer of high-performance AI chips to a company in a country of concern, such as China, Cuba, Iran, North Korea, and Russia, must be licensed by the Commerce Department separately.
These restrictions have encompassed the Nvidia H200, which is one of the strongest AI chips. Trump said last week his administration would grant sales of the processors to China on condition that the U.S. would get a quarter of the proceeds.
A lot of the opposition to this action by lawmakers has been initiated by the opposition party. Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., criticized Trump’s approval of H200 exports as evidence of a “haphazard and transactional approach” lacking a coherent strategy against China in December.
He stated, “American companies must remain the undisputed leader in AI hardware because our strategic competition with China on AI will boil down to whose ecosystem drives adoption and innovation globally.”
Meanwhile, Senate Banking Committee ranking member Elizabeth Warren, D-Mass., has also warned that China also wants such chips to modernize its military, design weapons, and monitor AI, based on Justice Department estimates.
Eventually, Trump has also experienced bipartisan opposition. The president had also earlier announced that he would permit Nvidia to restart its sales of the H20 to China, a chip that the President had limited only months before.
By that point, lawmakers had already reacted with more AI chip bills, such as the GAIN AI Act, which was introduced in November by a bipartisan committee that included Warren and Sen. Tom Cotton, R-Ark.
The bill would compel American companies to focus on selling high-technology chips in the nation before selling them to China. Even after Trump changed his policy regarding the export of chips, Chinese regulators have not permitted the free movement of Nvidia chips into the country.
Reuters also reported last week that Chinese customs officials have been ordered to block imports of H200 chips and have advised tech companies not to buy them unless required.
