A new amendment to the Defense Department's annual funding bill could upend global semiconductor markets. The Guarding American Innovation in Artificial Intelligence (GAIN AI) Act, introduced by Sen. Jim Banks (R–Ind.), would force U.S. chipmakers like Nvidia, AMD, and Intel to give American buyers first dibs on advanced graphics processing units (GPUs) before fulfilling overseas orders. It would also require anyone exporting, reexporting, or transferring such chips abroad to obtain a license from the Commerce Department.
Banks claims the GAIN AI Act "puts American companies and researchers before our adversaries like China." In practice, the proposal functions as a government-imposed price control that could distort supply chains and disrupt global semiconductor markets.
Current export controls instituted by both the Biden and Trump administrations already ban the sale of the most powerful GPUs—such as Nvidia's A100/H100 or RTX 5090—to China. The GAIN AI Act would take those restrictions a step further, targeting even less advanced AI chips through Banks' attempt to put "America first in action."
