The U.S. House of Representative on Wednesday rejected a new measure that would require suppliers of popular AI GPUs — such as AMD or Nvidia — to prioritize shipments of advanced processors to domestic companies over adversary nations like China, reports Bloomberg citing source familiar with the defense policy bill that the House was considering on Wednesday. The proposal was sidelined after Nvidia's chief executive met President Trump and U.S. lawmakers on Wednesday.
If the information is accurate, it represents a policy win for Nvidia as the regulation would have reshaped how advanced accelerators reach China and other sanctioned markets. Yet, keeping in mind China's self-inflicted ban on Nvidia hardware, this is hardly a big deal for now.
- U.S. customers did not want those products.
- There was no backlog of pending U.S. orders.
- The export would not cause shipment delays to domestic customers.
- The shipment would not harm American companies operating in other countries.
Supporters tried to attach the proposal to the annual defense bill — a package that usually passes with few obstacles — that is expected to be published on Friday. However, a person familiar with the bill told Bloomberg the GAIN AI proposal is not in the current draft, although it could still be added at the last minute.
Nvidia argued that the rule would erode U.S. competitiveness rather than secure domestic supply, and argued there was no evidence that American buyers could not get high-end AI silicon on time. This is technically true, as Chinese buyers can only get cut-down versions of Nvidia's Hopper (H20) processors, whereas American clients can get either full-fat Hopper H100 or H200, or the latest Blackwell GPUs.
On Wednesday, Donald Trump held talks in Washington with Nvidia chief executive Jensen Huang about U.S. export curbs on advanced AI accelerators, according to a source cited by Reuters. Huang spent the day also meeting members of Congress, where he argued that different AI-related regulations in different states would hold back AI progress.
While the exclusion of the GAIN AI Act could be considered a big lobbying win for Nvidia and other hardware suppliers, China's self-imposed import bans on Nvidia's hardware greatly reduces the value of Nvidia's efforts. Yet again, it is better not to have a restriction that is part of a law, so sidelining of the GAIN AI Act could still be important for Nvidia and others.
Despite the setback, China hardliners plan to keep pressing for tougher export controls on advanced AI hardware. They are preparing a new proposal — the so-called Secure and Feasible Exports Act — that would turn current limits on chip exports to China into permanent law, essentially only allowing American companies to ship cut-down version of their 2022 and 2023 products — which are on the verge to become largely irrelevant — to the People's Republic.
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