Senate Passes ‘GAIN AI’ Legislation to Prioritize Domestic AI Chip Orders
The United States Senate has enacted the ‘GAIN AI’ legislation, incorporated into the National Defense Authorization Act (NDAA). This initiative mandates that AI chip manufacturers, including industry giants Nvidia and AMD, prioritize domestic orders from American enterprises over foreign exports, especially to China and its allies.
As reported by Bloomberg, this bipartisan measure sailed through the Senate and is now poised for deliberation in the House of Representatives.
“Today, the Senate took decisive action to ensure that American customers, encompassing small enterprises and startups alike, do not find themselves relegated to the back of the line behind China’s technology powerhouses when seeking the latest AI chips,” remarked Senator Elizabeth Warren (D-MA), a co-sponsor of the bill.
Senator Jim Banks (R-IN), the principal co-sponsor, emphasized that the legislation will enhance U.S. competitiveness in AI and other advanced sectors while curtailing exports to global rivals, with a particular focus on China.
Despite the House of Representatives having passed its variant of the NDAA, it notably omits the stipulation requiring chipmakers to forsake export orders in favor of domestic sales.
Consequently, both chambers must now engage in negotiations to forge a consensus. However, the inclusion of this provision in the final bill awaiting presidential approval remains uncertain.
Nvidia has publicly criticized this legislation, asserting that its global sales channels “do not deprive U.S. customers of anything” and suggesting that the reasoning underpinning the bill resembles “alarmist science fiction.”
The firm further contends that it is “attempting to address an issue that does not exist” and warns that it may “stifle competition globally in any industry reliant on mainstream computing chips.”
Nvidia maintains that its shipments of H20 chips do not compromise the supply of other models, such as H100 and H200, as these products utilize distinct components.
While China remains Nvidia’s largest market outside the U.S., the disparity in revenue is significant. The United States represented nearly 50% of Nvidia’s sales in FY 2024, in stark contrast to China, which accounted for a mere 13%.
This proportion may diminish further, exacerbated by the ongoing trade war between Washington and Beijing, particularly as China’s leading tech firms face restrictions in acquiring Nvidia’s most advanced chips.
Source link: Tomshardware.com.
