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Bipartisan Bill Aims to Block Trump From Opening China's Door to Advanced AI Chips

MarketDash Editorial Team
3 days ago
A rare bipartisan effort in Congress seeks to prevent the Trump administration from easing restrictions on China's access to cutting-edge AI chips from Nvidia and AMD for the next 2.5 years, as concerns mount over national security implications.

Here's something you don't see every day: Republicans and Democrats teaming up to stop their own president from doing something. On Thursday, a bipartisan coalition of senators introduced legislation designed to block the Trump administration from giving China broader access to advanced artificial intelligence chips for the next two and a half years.

The SAFE CHIPS Act, filed by Republican Senator Pete Ricketts and Democrat Chris Coons, would require the Commerce Department to deny any license requests from buyers in China, Russia, Iran, or North Korea seeking AI chips more advanced than what they can currently obtain for 30 months. After that period, Commerce would need to brief Congress 30 days before making any rule changes, according to Reuters.

The bipartisan lineup is notable. Co-sponsors include Republican China hawk Tom Cotton, along with Republican Dave McCormick and Democrats Jeanne Shaheen and Andy Kim. It's a rare instance of lawmakers in Trump's own party moving to block the administration from loosening tech export controls on China, which tells you how seriously some members of Congress take the national security implications here.

The bill lands at a moment when America's expanding chip crackdown on China has dominated headlines. Nvidia Corp. (NVDA) CEO Jensen Huang and several investors have warned that U.S. policy could fundamentally reshape the semiconductor industry. Huang himself met with President Trump on Wednesday to discuss export restrictions while Congress weighed various bills to curb China's access to advanced AI chips.

The Policy Battles Heating Up

Huang's position is nuanced. He said he supports giving U.S. firms priority but criticized the proposed GAIN AI Act, arguing it would hurt the country. He welcomed reports that lawmakers dropped it from the defense bill. He's also pushing Congress to replace state-by-state AI rules with a single federal standard, warning that 50 different laws would stall innovation and threaten national security. House Majority Leader Steve Scalise, however, said that plan lacks the votes.

Meanwhile, the Trump administration has been sending mixed signals. Reports suggest it's considering allowing sales of Nvidia's H200 AI chips to China, a move that has Washington's China hawks particularly alarmed. They worry it could help Beijing accelerate AI-powered military systems and surveillance capabilities.

The administration recently imposed and then rolled back restrictions on Nvidia's H20 chips, responding to China's new export curbs on rare earth metals. The back-and-forth drew criticism from Republican Representative John Moolenaar, who chairs the House China Select Committee. Advanced Micro Devices, Inc. (AMD), Nvidia's rival, is also pushing to sell to China.

China's Already Moving On

Here's the irony: Beijing has already effectively shut Nvidia out of its AI-chip market. The company's share has plummeted from 95% to zero, according to reports, as China banned foreign chips from state data centers, tightened import checks, and raced to triple domestic AI-chip output by 2026. With stockpiles and improving homegrown alternatives, Chinese demand has collapsed.

Huang's response? Nvidia can thrive without China. He's projecting $3 trillion to $4 trillion in global AI-infrastructure spending by 2030, suggesting the company has plenty of other markets to pursue.

Trade Policy as Negotiating Tool

During negotiations with Beijing aimed at delaying China's rare earth controls, Trump delayed by one year a rule tightening U.S. tech export restrictions on subsidiaries of already-blacklisted Chinese companies. He has also vowed to overturn a Biden-era rule that restricts AI chip exports globally based partly on concerns about smuggling to China.

It's all part of a broader dance where tech export controls become bargaining chips in trade negotiations, which is precisely what worries the senators behind this bill. They want to take that option off the table, at least for the next 30 months.

The Stakes for Nvidia

The semiconductor giant remains a colossus despite the China headwinds. In October, Nvidia became the biggest company in terms of market cap, leapfrogging Big Tech peers like Apple Inc. (AAPL) and Microsoft Corp. (MSFT).

Nvidia shares were up 0.67% at $184.60 during premarket trading on Friday.

The SAFE CHIPS Act represents Congress attempting to draw a hard line on national security concerns, even if it means constraining the president's negotiating flexibility. Whether it gains enough traction to pass remains to be seen, but the bipartisan support suggests this isn't just political theater. The question is whether lawmakers can maintain their united front as the administration pushes back.

Back to News

Bipartisan Bill Aims to Block Trump From Opening China's Door to Advanced AI Chips

MarketDash Editorial Team
3 days ago
A rare bipartisan effort in Congress seeks to prevent the Trump administration from easing restrictions on China's access to cutting-edge AI chips from Nvidia and AMD for the next 2.5 years, as concerns mount over national security implications.

Here's something you don't see every day: Republicans and Democrats teaming up to stop their own president from doing something. On Thursday, a bipartisan coalition of senators introduced legislation designed to block the Trump administration from giving China broader access to advanced artificial intelligence chips for the next two and a half years.

The SAFE CHIPS Act, filed by Republican Senator Pete Ricketts and Democrat Chris Coons, would require the Commerce Department to deny any license requests from buyers in China, Russia, Iran, or North Korea seeking AI chips more advanced than what they can currently obtain for 30 months. After that period, Commerce would need to brief Congress 30 days before making any rule changes, according to Reuters.

The bipartisan lineup is notable. Co-sponsors include Republican China hawk Tom Cotton, along with Republican Dave McCormick and Democrats Jeanne Shaheen and Andy Kim. It's a rare instance of lawmakers in Trump's own party moving to block the administration from loosening tech export controls on China, which tells you how seriously some members of Congress take the national security implications here.

The bill lands at a moment when America's expanding chip crackdown on China has dominated headlines. Nvidia Corp. (NVDA) CEO Jensen Huang and several investors have warned that U.S. policy could fundamentally reshape the semiconductor industry. Huang himself met with President Trump on Wednesday to discuss export restrictions while Congress weighed various bills to curb China's access to advanced AI chips.

The Policy Battles Heating Up

Huang's position is nuanced. He said he supports giving U.S. firms priority but criticized the proposed GAIN AI Act, arguing it would hurt the country. He welcomed reports that lawmakers dropped it from the defense bill. He's also pushing Congress to replace state-by-state AI rules with a single federal standard, warning that 50 different laws would stall innovation and threaten national security. House Majority Leader Steve Scalise, however, said that plan lacks the votes.

Meanwhile, the Trump administration has been sending mixed signals. Reports suggest it's considering allowing sales of Nvidia's H200 AI chips to China, a move that has Washington's China hawks particularly alarmed. They worry it could help Beijing accelerate AI-powered military systems and surveillance capabilities.

The administration recently imposed and then rolled back restrictions on Nvidia's H20 chips, responding to China's new export curbs on rare earth metals. The back-and-forth drew criticism from Republican Representative John Moolenaar, who chairs the House China Select Committee. Advanced Micro Devices, Inc. (AMD), Nvidia's rival, is also pushing to sell to China.

China's Already Moving On

Here's the irony: Beijing has already effectively shut Nvidia out of its AI-chip market. The company's share has plummeted from 95% to zero, according to reports, as China banned foreign chips from state data centers, tightened import checks, and raced to triple domestic AI-chip output by 2026. With stockpiles and improving homegrown alternatives, Chinese demand has collapsed.

Huang's response? Nvidia can thrive without China. He's projecting $3 trillion to $4 trillion in global AI-infrastructure spending by 2030, suggesting the company has plenty of other markets to pursue.

Trade Policy as Negotiating Tool

During negotiations with Beijing aimed at delaying China's rare earth controls, Trump delayed by one year a rule tightening U.S. tech export restrictions on subsidiaries of already-blacklisted Chinese companies. He has also vowed to overturn a Biden-era rule that restricts AI chip exports globally based partly on concerns about smuggling to China.

It's all part of a broader dance where tech export controls become bargaining chips in trade negotiations, which is precisely what worries the senators behind this bill. They want to take that option off the table, at least for the next 30 months.

The Stakes for Nvidia

The semiconductor giant remains a colossus despite the China headwinds. In October, Nvidia became the biggest company in terms of market cap, leapfrogging Big Tech peers like Apple Inc. (AAPL) and Microsoft Corp. (MSFT).

Nvidia shares were up 0.67% at $184.60 during premarket trading on Friday.

The SAFE CHIPS Act represents Congress attempting to draw a hard line on national security concerns, even if it means constraining the president's negotiating flexibility. Whether it gains enough traction to pass remains to be seen, but the bipartisan support suggests this isn't just political theater. The question is whether lawmakers can maintain their united front as the administration pushes back.