Trump wants Nvidia to sell powerful AI chips to Beijing. Washington’s China hawks are pushing back

The proposal by U.S. President Donald Trump to allow Nvidia to export advanced artificial intelligence chips to China has sparked significant backlash among influential lawmakers in Washington, including members from his own party. This week saw the U.S. House of Representatives Foreign Affairs Committee take a step forward by advancing the AI Overwatch Act, a bill designed to enhance congressional oversight of AI chip exports. Introduced by Committee Chairman Rep. Brian Mast, R-Fla., the AI Overwatch Act would require approval from both the House Foreign Affairs Committee and the Senate Banking Committee for any advanced chip shipment licenses within a 30-day timeframe. This gives Congress the authority to block sales through a joint resolution. The bill emerges as the Trump Administration moves to authorize Nvidia to sell its powerful H200 chips to China, surpassing the capabilities of previously permitted exports. If enacted, the AI Overwatch Act seeks to revoke existing licenses for the transfer of AI chips and impose a temporary ban until a national security strategy on AI exports is presented by the administration. The legislation allows for exceptions for “trusted” U.S. companies exporting chips under American control, provided they adhere to established security standards. Chairman Mast has voiced concerns, stating, "Companies like Nvidia aim to sell millions of cutting-edge AI chips, which play a pivotal role in warfare, to Chinese military firms such as Alibaba and Tencent," framing this as a potential national security threat. The bill has garnered additional support from Rep. John Moolenaar, R-Mich., who regards it as essential for safeguarding America's technological advantage. However, the extent of support for the AI Overwatch Act in Congress remains uncertain. The bill is poised to become a focal point in an escalating debate in Washington regarding the implications of Nvidia's chip exports as a national security concern versus the argument that such exports are vital to maintaining U.S. technological leadership. Among those advocating for more lenient policies is David Sacks, the White House's AI and crypto advisor, who has criticized the AI Overwatch Act, suggesting it undermines Trump's authority over chip exports. Sacks and other supporters of increased Nvidia shipments contend that U.S. restrictions have been ineffective, allowing Chinese competitors to gain ground. They argue that keeping U.S.-designed chips central to the global AI landscape is critical. This perspective aligns with views from Nvidia CEO Jensen Huang and industry lobbyists. On the opposing side, bipartisan lawmakers caution that the H200 chips could enhance China's AI capabilities and be utilized by its military. Current U.S. regulations require specific licenses from the Commerce Department for high-performance AI chip exports to "countries of concern," including China, Cuba, Iran, North Korea, and Russia, which encompasses Nvidia's H200. Recently, Trump confirmed his administration would approve the sale of H200 chips to China, contingent on the U.S. receiving 25% of the proceeds. This decision has prompted criticism from various lawmakers. For instance, Senate Intelligence Committee Vice Chairman Mark Warner, D-Va., condemned the approval as indicative of a "haphazard and transactional approach" that lacks a clear strategy against China. He emphasized the necessity for American companies to maintain their leadership in AI hardware. Furthermore, Senate Banking Committee ranking member Elizabeth Warren, D-Mass., has also raised alarms about China's interest in acquiring such chips for military advancements and AI surveillance, citing assessments from the Justice Department. Trump's policy changes regarding chip exports have faced bipartisan resistance, particularly following his earlier decision to restrict Nvidia's sales of the H20 chip to China. In response, lawmakers proposed additional legislation, including the GAIN AI Act, aimed at prioritizing domestic sales of advanced chips before allowing exports to China. Despite the evolving landscape of chip exports, reports indicate that Chinese regulators are not facilitating the return of Nvidia's chips to the country, with customs authorities instructed to block imports of the H200 chips unless deemed essential.