US Lawmakers Push for New Legislation to Extend AI Chip Export Restrictions to China
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A New Legislative Front in the Tech War
Bipartisan bill seeks to lock in export controls through 2028
A group of U.S. senators is pushing for new legislation that would formally restrict the sale of the most advanced artificial intelligence chips to China until at least 2028. According to a report from tomshardware.com, the proposed "SAFE Chips Act" aims to codify and extend existing export controls, directly targeting the flagship products of American semiconductor giants Nvidia and AMD.
The move represents a significant escalation in the ongoing technological competition between the United States and China, shifting from temporary regulatory actions by the Department of Commerce to a more permanent, congressionally mandated policy. The bill's sponsors argue it is necessary to protect national security by preventing China's military and intelligence services from accessing cutting-edge computing power. But what would this law actually do, and how would it reshape the global AI hardware landscape?
Defining the Cutting Edge: What Chips Are on the Line?
The core of the SAFE Chips Act is its specific performance threshold. The proposed legislation would prohibit the export of AI accelerators that exceed the performance of chips that are already approved for sale to China. According to tomshardware.com, this currently means restricting AMD and Nvidia to selling only accelerators comparable to the Nvidia H20 or the AMD MI308.
These chips are significantly less powerful than the companies' state-of-the-art offerings available elsewhere in the world. For context, Nvidia's H20 is a downgraded version created specifically for the Chinese market following earlier export rules. It possesses a fraction of the computing power of Nvidia's premier data center GPUs like the H100 or the newer Blackwell architecture chips. The bill would effectively freeze the technological ceiling for AI hardware exports at this level for several years, locking Chinese entities out of successive generations of Western AI technology.
The Political Engine Behind the Bill
A rare show of bipartisan agreement on China policy
The legislation is being championed by Senators Steve Daines (R-Mont.) and Gary Peters (D-Mich.), indicating support from both sides of the political aisle. Their argument, as reported, centers on closing perceived loopholes and ensuring a long-term strategy. They contend that current export controls, managed by the Bureau of Industry and Security (BIS), are temporary administrative actions that could be rolled back by a future administration.
By enacting a law, they seek to create a stable, multi-year policy that provides clarity to the industry while sending a unambiguous message to Beijing. The senators frame the issue not merely as trade policy, but as a foundational element of national defense in an age defined by algorithmic warfare and intelligence. This political push underscores how concern over China's technological ascent has become one of the few unifying themes in a divided Congress.
Industry Impact: Nvidia and AMD in the Crosshairs
The direct commercial impact on Nvidia and AMD would be substantial. China has historically been a massive market for semiconductor companies, accounting for roughly a fifth of Nvidia's revenue in recent years. The proposed act would mandate that these firms continue to develop and sell deliberately handicapped products for one of the world's largest economies, potentially ceding long-term market share and influence.
According to the report, the bill would restrict sales until 2028. This four-year window is critical. It spans multiple product cycles in the fast-moving AI chip sector. While companies could still generate revenue from approved chips like the H20, they would be blocked from offering any more advanced solutions that emerge during that period. This creates a powerful incentive for Chinese tech firms and the government to redouble efforts toward self-sufficiency, potentially accelerating the development of competitive domestic alternatives from companies like Huawei.
The Global Semiconductor Chessboard
How export controls reshape supply chains and alliances
The SAFE Chips Act is not an isolated move but part of a broader, coordinated Western strategy. The United States has actively lobbied allies like the Netherlands and Japan, which host critical chip manufacturing equipment companies ASML and Tokyo Electron, to implement similar restrictions. The goal is to create a unified technological barrier that is difficult to circumvent.
This policy accelerates the fragmentation of the global semiconductor ecosystem into separate spheres. One sphere is led by the U.S. and its allies with access to the full spectrum of leading-edge technology. The other, which includes China, is forced to rely on a mix of older-generation imported tech and an emerging domestic supply chain. This decoupling carries profound economic implications, potentially leading to duplicate supply chains, higher costs, and a slowdown in the pace of global innovation as collaborative networks are severed.
The Innovation Dilemma and Unintended Consequences
Proponents of the bill argue it safeguards the U.S. technological lead, a key source of economic and military advantage. However, critics, including some within the industry, warn of potential backlash. Strict, long-term export controls could incentivize China to achieve true independence faster. We've already seen signs of this: Huawei's Ascend AI chips and SMIC's progress in manufacturing advanced semiconductors are frequently cited as evidence.
There is also a risk of encouraging "gray market" activities or rerouting of chips through third countries. Furthermore, by depriving U.S. chip designers of a major source of revenue, the law could theoretically reduce the funds available for the very research and development needed to maintain the American edge. It creates a complex calculus: does restricting a competitor today weaken your own ability to innovate tomorrow?
The Road to 2028: What Happens Next?
The introduction of the SAFE Chips Act is just the first step in a lengthy legislative process. The bill must pass through committee hearings, potentially be amended, and secure majority votes in both the Senate and the House of Representatives before reaching the President's desk for signature. Its progression will be closely watched by lobbyists from the tech industry, national security agencies, and foreign governments.
Even if the bill does not become law in its current form, its introduction signals a clear legislative intent. It pressures the executive branch to maintain a hard line on exports and informs companies that the political winds are blowing strongly toward sustained restriction. For global tech CEOs planning their product roadmaps and market strategies, the message from Washington is increasingly clear: assume that access to the highest-performance AI chips for China will remain blocked for the foreseeable future.
A Long-Term Strategy with Global Ripples
The proposed SAFE Chips Act, as reported by tomshardware.com on December 5, 2025, represents a pivotal attempt to move U.S.-China tech policy from reactive regulation to proactive, long-term law. By seeking to lock in export controls until 2028, its sponsors aim to provide certainty and demonstrate resolve. The technical heart of the bill—tying allowed exports to the performance of chips like the Nvidia H20—is a direct attempt to keep China's AI capabilities several generations behind.
The implications extend far beyond the balance sheets of AMD and Nvidia. This policy fuels a technological decoupling that is reshaping global trade, forcing nations to choose sides in a new kind of cold war fought with transistors and algorithms. Whether this strategy successfully contains a rival or ultimately spurts the creation of a new, independent technological powerhouse remains one of the defining questions of the decade. The debate over this bill will be a key chapter in that unfolding story.
#AIChips #USChinaTech #ExportControls #Semiconductors #NationalSecurity
