The Looming Standoff Over AI Chip Exports: Why the GAIN AI Act Needs to Pass Now
The Biden governance faces a critical juncture in its strategy to maintain U.S. leadership in artificial intelligence. A promising bipartisan bill, the Generating Artificial Intelligence National Security (GAIN AI) Act, is stalled – and the reasons why are deeply concerning. This isn’t just about semiconductors; it’s about the future of technological competition with China and the ability to support our allies.
as someone who’s worked on U.S.-China technology policy at the State Department and now studies this space at the American Enterprise Institute, I’ve seen firsthand the complexities involved.The current situation feels like fumbling the ball just before the goal line.
The Problem: A Rigid Approach to AI Export Controls
Currently, U.S. export controls on advanced AI chips are governed by a complex system. The administration’s approach relies heavily on a “20% rule” – restricting sales to China if their chips contain more than 20% U.S. technology. This threshold is proving problematic for several reasons:
* It’s easily circumvented. Chinese firms are actively working to redesign chips to fall below this threshold.
* It lacks precision. The rule treats all non-U.S. markets the same, hindering deployments to crucial allies.
* It offers no exceptions for trusted partners. There’s no mechanism to prioritize sales to countries aligned with U.S. strategic interests.
The SAFE Act, frequently enough presented as an alternative, would exacerbate these issues. It would codify a rigid, statutory mandate, removing the executive branch’s ability to adapt to evolving circumstances. This blunt instrument would likely deny China access to advanced chips, but at a notable cost to U.S. allies and our own industry.
GAIN AI: A Balanced Solution
The GAIN AI Act emerged as a rare compromise. It aims to strike a balance between national security concerns and the need to maintain a competitive edge for U.S. chipmakers. Here’s what it does:
* Focuses on end-use. It prioritizes controlling the application of AI technology, rather than simply the chips themselves.
* Allows for allied deployments. It provides a pathway for strategic exports to trusted partners.
* Addresses industry concerns. It acknowledges the importance of maintaining market access for U.S. companies.
The bill garnered bipartisan support in both the House and Senate. It also won backing from major U.S. cloud providers, demonstrating broad consensus. It navigated months of tough negotiations between those advocating for a hard line on China and those prioritizing commercial interests.
Why is it Stalling?
Reports suggest the White House is the roadblock. This raises two troubling possibilities:
- misunderstanding the Bill: Perhaps administration officials haven’t fully grasped the GAIN AI Act’s intent and how it aligns with the President’s objectives. A deeper dive into the updated provisions is warranted.
- Corporate Capture: A more concerning scenario is that the administration is prioritizing the short-term profits of chip design firms over long-term strategic competition. Allowing continued sales to China simply because they pay a premium price is a risky gamble.
Either explanation is deeply unsettling.
The stakes are High
GAIN AI isn’t a perfect bill, but it’s the best option on the table. A frustrated Congress is unlikely to produce a better alternative. Furthermore, continuing to operate in the current incoherent state – wanting to promote U.S. AI exports while simultaneously enabling Chinese competitors – is unsustainable.
You need to understand that this isn’t just about economics. It’s about national security. Your future technological advantage depends on making smart decisions now.
The administration must act decisively. It’s time to pass the GAIN AI Act and demonstrate a commitment to winning the AI race.
Ryan Fedasiuk is a fellow for China and Technology at the American Enterprise Institute and an adjunct professor at Georgetown University’s Security Studies Program. He previously served as an advisor for U.S.-China Bilateral Affairs at the U.S. Department of State.
[Image: Official White House Photo by Molly Riley via Wikimedia Commons](https://commons.wikimedia.org/wiki/File:P2025
