White House urges Congress to block bill curbing Nvidia's China chip sales

White House officials are urging members of Congress to reject a measure that would limit Nvidia Corp.’s ability to sell AI chips to China and other adversary nations, according to people familiar with the matter, dimming prospects for legislation opposed by the world’s most valuable company. 

The so-called GAIN AI Act would create a system that requires chipmakers to give US companies first dibs on AI chips that are controlled for export to China and other arms-embargoed countries — an “America first” framing designed to appeal to the Trump administration. That would effectively bar Nvidia and Advanced Micro Devices Inc. from selling their best products to the Asian country, making GAIN AI something of a bipartisan congressional pushback to President Donald Trump’s suggestions that he is open to such shipments. 

The White House’s stance is a victory for Nvidia, which has publicly lobbied against the legislation, insisting there are no US customers facing a shortage of its products. If GAIN AI doesn’t wind up passing, that would also mark a loss for some American hyperscalers including Microsoft Corp., which supported a measure that would preserve their access to hardware over Chinese rivals, while also clearing an easier path to ship advanced AI chips to US-owned data centers in places like Saudi Arabia and the United Arab Emirates. 

Killing GAIN AI would not, however, mean the end of China chip curb efforts on Capitol Hill, where there is broad bipartisan support for limiting Beijing’s AI ambitions. Lawmakers have separately begun working on a measure that would codify existing limits on AI chip sales to the Asian country. That simpler legislation, which has not previously been reported, would require the Commerce Department, which oversees approvals of restricted technology shipments, to deny all applications for sales to China of any AI chips that are more powerful than what the US currently allows, effective for 30 months. 

The fate of both bills remains undecided. Lawmakers are still considering whether to include GAIN AI in an annual defense bill that’s under discussion, while also determining when to introduce the second bill, which is called the Secure and Feasible Exports, or SAFE, Act of 2025. All told, the situation makes clear the significant appetite in Congress to play a bigger role in the wonky world of semiconductor export controls, a national security policy area that’s risen to the forefront of the tech and trade war between Washington and Beijing. 

Nvidia, which has lobbied relentlessly for greater access to the world’s biggest market for semiconductors, is not out of the woods yet. 

A spokesperson for Republican Senator Jim Banks, who sponsored GAIN AI, did not immediately respond to a request for comment. The White House, whose office of legislative affairs is leading the lobbying effort against the bill, also did not immediately respond. A representative for Senator Chris Coons, who is leading the SAFE Act effort, confirmed that the bill is under discussion, while a spokesperson for fellow backer Senator Pete Ricketts did not immediately respond. Spokespeople for Nvidia and AMD also did not immediately respond. 

The US first controlled Nvidia shipments to China in 2022, citing concerns that advanced AI could lend Beijing a military edge.  Washington has several times ratcheted up those controls, including under Trump, who in April restricted shipments of Nvidia’s H20 chips that the company designed specifically for the Chinese market in compliance with earlier US government thresholds. The US also requires companies to seek Washington’s permission for advanced AI chip sales to some 40 other countries, including Saudi Arabia and the UAE, over worries that shipments there could wind up benefiting Beijing. 

Trump’s team has issued approvals for chip sales to those Gulf nations, as well as for sales to China of H20 chips he’d limited only months prior — the latter in exchange for a 15% cut of the revenue, a legally dubious arrangement that hasn’t been codified. The president also suggested he’d be open to Nvidia selling to China a downgraded version of its newer and more advanced Blackwell chips, a prospect that alarmed national security hawks in and outside the administration, particularly as the president prepared to meet with Chinese leader Xi Jinping last month.  

Trump ultimately said he didn’t discuss Blackwell shipments with Beijing, and Xi’s administration has discouraged Chinese companies from using even the AI chips that the US has permitted Nvidia to sell. Nvidia Chief Executive Officer Jensen Huang said Wednesday in a Bloomberg Television interview that the chipmaker’s forecast for China revenue is zero. “We would love the opportunity to be able to reengage the Chinese market with excellent products,” the tech chief said following Nvidia’s quarterly financial report. 

US Treasury Secretary Scott Bessent has said the US could one day allow Nvidia to sell Blackwell chips to China — once those semiconductors are no longer the most advanced. “I don’t know whether it’s 12 or 24 months,” Bessent told CNBC earlier this month. “Given the incredible innovation that goes on at Nvidia, where the Blackwell chips may be 2, 3, 4 down their chip stack in terms of efficacy, and at that point, they could be sold on.” 

The SAFE Act is a direct reckoning with that idea. It would take the decision on whether to sell those chips away from the executive branch, legally requiring the Commerce Department to deny export applications for chips that are more advanced than the H20. But that mandate would also expire after two and a half years, a recognition of the rapidly changing landscape for AI hardware — an industry that’s changed dramatically since OpenAI launched ChatGPT just three years ago.