Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) are reportedly lining up behind new U.S. legislation that could further curb Nvidia Corporation's (NASDAQ:NVDA) AI chip exports to China.
Amazon, Microsoft Break With Nvidia On New Export Controls
Amazon and Microsoft are backing the Gain AI Act, reported the Wall Street Journal.
It is a congressional proposal that would tighten restrictions on exporting advanced AI chips to China and other countries under U.S. arms embargoes.
Microsoft has publicly endorsed the Gain AI Act, while Amazon's cloud division has privately informed Senate staffers, the report noted, citing congressional aides and people familiar with the matter.
The move marks a rare public split with Nvidia, the dominant supplier of AI processors powering both companies' cloud services.
Microsoft, Amazon and Nvidia did not immediately respond to Benzinga's request for comments.
Meta, Google And Trump Yet To Take A Stance
As per the report, Meta Platforms, Inc. (NASDAQ:META), Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google and President Donald Trump have not yet taken a stance on the issue.
Although Trump earlier this month stated that Nvidia’s advanced Blackwell AI chip will not be made available to "other people."
Anthropic, which typically backs export controls and relies on chips from Nvidia, Amazon and Google, is also supporting the policy, the report said.
The bill would require chipmakers to prioritize U.S. demand before sending products overseas. It would also grant trusted entities the ability to transfer chips to certain regions without waiting for government approval — a process that has often slowed their global data center expansion.
Nvidia Pushes Back As China Market Shrinks To ‘Zero'
Nvidia, however, is lobbying aggressively against the bill. The company argues it would unnecessarily interfere in the semiconductor market and invite additional restrictions. CEO Jensen Huang has warned repeatedly that the company's China business has deteriorated sharply.
Huang said earlier this year that Nvidia's market share in China had fallen from about 95% to almost nothing. This happened due to tightening U.S. export rules and Beijing's move to ban foreign AI chips from state-funded data centers.
He has also cautioned that China could overtake the U.S. in AI thanks to cheaper energy and fewer regulatory hurdles.
Congress Weighs Act As Tech Giants Take Sides
Lawmakers are considering attaching the Gain AI Act to the annual National Defense Authorization Act.
The proposal has support from key Democrats, including Senate Minority Leader Chuck Schumer (D-N.Y.), but still needs approval from Senate Banking Chair Tim Scott (R-S.C.) and House Republican leadership.
Meanwhile, tech stocks lost over $700 billion in market value Thursday afternoon as fading hopes for Fed rate cuts and concerns about AI-related energy shortages sparked a sharp risk-off move, with the Nasdaq 100 sliding 2.05% and major players like Nvidia, Tesla Inc. (NASDAQ:TSLA), Alphabet, Broadcom, Inc. (NASDAQ:AVGO), Amazon and Microsoft posting steep declines.
Nvidia closed at $186.86 on Thursday, down 3.58%, and slipped another 0.50% to $185.92 in after-hours trading. The company ranks in the 98th percentile for Growth and 93rd for Quality in Benzinga's Edge Stock Rankings, underscoring its strong standing compared with industry peers.
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Photo: Shutterstock/Saulo Ferreira Angelo
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
