Nvidia fights GAIN AI Act that would prioritize US chip orders

Nvidia has criticized the proposed GAIN AI Act, arguing it would restrict global competition for advanced chips and harm U.S. economic leadership. The legislation, part of the National Defense Authorization Act, would require AI chipmakers to prioritize domestic orders before supplying foreign customers, mirroring restrictions from the AI Diffusion Rule that allocated computing power limits to different countries.

What you should know: The GAIN AI Act would mandate that U.S. companies receive priority access to advanced AI chips before they can be exported internationally.

• Short for Guaranteeing Access and Innovation for National Artificial Intelligence Act, the legislation stipulates exporters must obtain licenses for silicon shipments exceeding certain performance thresholds.
• The bill specifically targets chips “with total processing power of 4,800 or above” and aims to restrict advanced AI chip exports to foreign entities while U.S. companies are waiting for the same technology.

What they’re saying: Nvidia strongly opposes the legislation, claiming it addresses a non-existent problem.

• “We never deprive American customers in order to serve the rest of the world. In trying to solve a problem that does not exist, the proposed bill would restrict competition worldwide in any industry that uses mainstream computing chips,” an Nvidia spokesperson said.

The big picture: The GAIN AI Act represents Washington’s broader strategy to maintain technological superiority over China while ensuring domestic access to critical AI infrastructure.

• The rules mirror conditions from former President Joe Biden’s AI Diffusion Rule, which allocated specific computing power levels to allies and other countries.
• Both measures aim to limit China’s ability to obtain high-end technology amid fears the country would use AI capabilities to enhance its military operations.

Recent developments: The legislation comes as the Trump administration pursues alternative approaches to chip export restrictions.

• Last month, President Donald Trump made an unprecedented deal with Nvidia to give the government a cut of its sales in exchange for resuming exports of banned AI chips to China.
• This arrangement suggests a shift toward revenue-sharing models rather than outright export bans for managing technology transfer to strategic competitors.