The Trump administration’s potential approval of Nvidia’s advanced AI chip sales to China is sparking significant opposition from key figures in Washington, including members of his own party. This dissent has coalesced around a new legislative proposal, the AI Overwatch Act, which aims to strengthen congressional oversight over the export of sophisticated artificial intelligence hardware.
Spearheaded by Representative Brian Mast, the chairman of the House Foreign Affairs Committee, the AI Overwatch Act, introduced last month, proposes a robust approval process for AI chip exports. Under its provisions, any license for the sale of advanced AI chips would require sign-off from both the House Foreign Affairs Committee and the Senate Banking Committee within a 30-day window. This mechanism would empower lawmakers to effectively block such sales through a joint resolution.
This legislative move comes as the administration reportedly considers granting Nvidia licenses to export its H200 chips to China. These chips represent a significant leap in processing power compared to previously permitted exports, raising concerns among critics. The proposed bill, if enacted, would nullify existing licenses for similar AI chip transfers and institute a temporary moratorium on new sales until a comprehensive national security strategy for AI exports is established. While the bill includes provisions for exemptions for U.S. companies adhering to stringent security standards and operating under U.S. control, the core intent is to rein in the flow of cutting-edge AI technology.
Chairman Mast has articulated his concerns, stating, “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.” He frames these potential sales as a direct national security risk. The bill has also garnered support from Representative John Moolenaar, the Republican chairman of the Select Committee on China, who described it as a “critical step toward protecting America’s technological edge.” However, the ultimate breadth of support for the AI Overwatch Act in both chambers of Congress remains to be seen.
**A Divide in Washington**
The AI Overwatch Act is poised to become a focal point in a broader ideological battle within Washington. On one side are lawmakers who view the export of Nvidia’s advanced chips as a significant national security vulnerability. On the other are officials and industry voices who argue that such exports are crucial for maintaining U.S. technological dominance and preventing China from developing its own indigenous AI capabilities.
Advocating for the latter perspective is David Sacks, the White House’s AI and cryptocurrency czar. A prominent entrepreneur and investor from Silicon Valley, Sacks has openly criticized the AI Overwatch Act, recently amplifying a social media claim that the bill would undermine President Trump’s authority on AI chip export decisions.
Sacks and his allies within the Trump administration contend that existing U.S. restrictions on chip exports have been counterproductive, inadvertently ceding technological ground to Chinese competitors. Their argument centers on the strategic advantage of keeping U.S.-designed chips at the core of the global AI infrastructure, a viewpoint echoed by Nvidia CEO Jensen Huang and various industry lobbyists.
Conversely, a bipartisan coalition of lawmakers argues that Nvidia’s H200 chips could significantly enhance China’s AI capabilities, potentially fueling its military modernization and advanced research initiatives. Current U.S. export controls mandate individual licenses from the Commerce Department for high-performance AI chips destined for countries designated as “countries of concern,” which include China.
While these controls have historically encompassed chips like the H200, President Trump indicated last week that his administration would approve sales of these processors to China, contingent on the U.S. receiving a 25% share of the revenue.
**Mounting Opposition and Shifting Sands**
Much of the legislative pushback has emanated from the opposition party. In December, Senate Intelligence Committee Vice Chairman Mark Warner expressed strong criticism of the Trump administration’s approval of H200 exports, labeling it a “haphazard and transactional approach” that lacked a coherent strategy against China. He emphasized, “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.”
Similarly, Senate Banking Committee ranking member Elizabeth Warren has voiced concerns that China intends to leverage these advanced chips for military upgrades, weapons development, and AI-driven surveillance, citing assessments from the Justice Department.
However, Trump’s approach to AI chip exports has also encountered resistance from within his own party. Prior to the H200, the president had signaled an intention to allow Nvidia to resume sales of the H20 chip to China, a move that reversed an earlier restriction imposed just months prior. This policy fluctuation also spurred legislative action, including the bipartisan GAIN AI Act, introduced in November by a group including Senators Warren and Tom Cotton. This act would mandate that U.S. firms prioritize domestic sales of advanced chips before exporting them to China.
Despite these evolving U.S. policies, Chinese regulatory actions have not facilitated a free flow of Nvidia’s chips into the country. Reports from last week indicated that Chinese customs authorities have been instructed to block imports of H200 chips and have cautioned tech companies against their procurement unless absolutely necessary. This signals a complex geopolitical landscape where technological prowess and national security interests are increasingly intertwined, with significant implications for the global AI industry.
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