Congress advances AI Overwatch Act, seeking veto power over Trump's AI chip exports to China

Reviewed byNidhi Govil

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The House Foreign Affairs Committee voted 42-2 to advance the AI Overwatch Act, which would give Congress veto power over AI chip exports to China and other adversaries. The bipartisan legislation challenges Trump's decision to allow Nvidia H200 sales to China with a 25% revenue cut, creating a rift between China hawks in Congress and the White House over national security versus technological dominance.

Congressional Oversight Challenges Trump's AI Chip Export Strategy

The House Foreign Affairs Committee advanced the AI Overwatch Act by a 42-2 margin on Wednesday, setting up a potential showdown between Congress and the Trump administration over control of AI chip exports to China and other adversary nations

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. The bipartisan legislation, introduced in December by Representative Brian Mast, would require both the House Foreign Affairs Committee and Senate Banking Committee to review and potentially block export licenses for advanced AI processors within 30 days through a joint resolution

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Source: Bloomberg

Source: Bloomberg

The bill represents a direct response to President Donald Trump's decision last month to ease longstanding export controls on China, specifically approving Nvidia H200 processors sales with a 25% revenue cut requirement

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. Under the AI Overwatch Act, Congress would gain veto power over chip exports, allowing lawmakers to ban sales of Nvidia H200 processors and AMD's Instinct MI325X to Chinese customers even if the executive branch explicitly authorized them

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Source: Market Screener

Source: Market Screener

Codifying Export Controls and Terminating Existing Licenses

The legislation would codify existing performance limitations that currently allow AMD and Nvidia to ship H20 and MI308 processors to entities in adversary nations not specifically blacklisted by the U.S. government

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. Beyond oversight, the text endorsed by Republicans and Democrats would outright ban sales of Nvidia's more advanced Blackwell chips to China for at least two years, transforming advanced AI chip export controls from regulatory guidelines into federal law

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Source: Tom's Hardware

Source: Tom's Hardware

If passed, the AI Overwatch Act would terminate existing licenses, impose a temporary blanket denial until a new national security strategy is submitted, and subject any future approvals to congressional review

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. The measure calls for allowing members of the House Foreign Affairs Committee and Senate Banking committees to see the numbers of chips up for export as well as the end-users buying them, providing unprecedented transparency in the approval process

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Trusted US Person Framework for Allied Nations

One notable provision in the legislation creates a framework for "trusted" U.S. companies to receive license exemptions when sending chips to U.S. allies and neutral countries. Under this arrangement, a trusted U.S. person may deploy and operate advanced, otherwise restricted AI GPUs abroad without certain export licenses, provided the hardware remains under U.S. ownership and control, is not placed in a country of concern, and meets strict security, ownership, and audit requirements

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. Microsoft executive Fred Humphries commended this approach, though the company has not endorsed a specific bill

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This framework allows the U.S. to export AI capability as a service to allies and partners while keeping physical control of the most powerful processors in American ownership, ensuring that even when allies access top-tier AI capability, ownership, oversight, and strategic leverage remain permanently with the United States

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White House Pushback and Political Tensions

White House AI czar David Sacks has publicly criticized the bill, endorsing social media claims that the legislation was orchestrated by "never Trumpers" to undermine Trump's authority over AI chip exports

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. Conservative political activist Laura Loomer also attacked the draft bill in a post on X, saying it "yanks control of advanced AI chip exports away from President Trump"

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Sacks and other Trump administration officials have argued that selling in China's market will encourage foreign companies to become reliant on American technology, boosting US technological leadership while offering a product that can compete with Huawei Technologies' systems

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. This approach has been met with skepticism from Republicans and Democrats on Capitol Hill, who have coalesced around safeguarding U.S. innovation from adversary nations.

National Security Risk Versus Technological Dominance Debate

"Companies like Nvidia are requesting to sell millions of advanced AI chips, which are the cutting edge of warfare, to Chinese military companies like Alibaba and Tencent," said Brian Mast, framing the issue as a national security risk

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. Mast argued that these are the same companies that work to spy against the United States and that the Chinese Communist Party uses to try and defeat the United States

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China hawks warn that sending highly advanced American chips to the Asian country may inadvertently strengthen its military and economy, threatening U.S. national security

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. Representative Gregory Meeks, the top Democrat on the panel, said lawmakers want to "send a clear message that our national security, our foreign policy, and our technological crown jewels are not for sale"

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The AI Arms Race and Path Forward

Mast compared the proposed congressional oversight to the foreign military sales process used for weapons exports, arguing that AI accelerators now represent the same strategic importance in the AI arms race

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. Representative John Moolenaar, Chairman of the Select Committee on China and cosponsor of the legislation, cited reports showing that China still trailed American chip designs despite advancements in rack-scale architectures, expressing concerns that granting China access to potentially millions of chips generations beyond its domestic capabilities will undermine U.S. AI dominance objectives

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The bill now heads to the House for a floor vote, though the Senate has yet to release a companion version

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. Even if the AI Overwatch Act wins support in the House, it still faces a long road to becoming law, requiring passage in both the Senate and House, and must be signed by the president or have his veto overridden before Congress will gain authority over U.S. AI exports

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. The debate highlights a fundamental tension in U.S. trade policy between maintaining technological dominance through market presence and protecting national security through export restrictions, with geopolitical risk calculations at the center of this emerging battle in Washington.

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