Update 9/4/2025 05:28 am PT: An Nvidia spokesperson has reached out and provided this comment.
"The AI Diffusion Rule was a self-defeating policy, based on doomer science fiction, and should not be revived. Our sales to customers worldwide do not deprive U.S. customers of anything — and in fact expand the market for many U.S. businesses and industries. The pundits feeding fake news to Congress about chip supply are attempting to overturn President Trump's AI Action Plan and surrender America's chance to lead in AI and computing worldwide."
Original Article
The U.S. Senate on Tuesday unveiled a preliminary version of the annual defense policy package that includes a requirement for American developers of AI processors to prioritize domestic orders for high-performance AI processors before supplying them to overseas buyers and explicitly calls to deny exports of the highest-end AI GPUs. The legislators call their initiative the Guaranteeing Access and Innovation for National Artificial Intelligence Act of 2025 (GAIN AI Act), and their goal is to ensure that American 'small businesses, start-ups, and universities' can lay their hands on the latest AI GPUs from AMD, Nvidia, etc, before clients in countries of concern and nations that have close relationships with such countries. However, if the bill becomes a law, it will hit American companies hard.
Breaking: The Senate's latest NDAA text, which dropped today, includes the GAIN AI Act - requiring US AI chip firms sell to American companies first.Huge win if this is included in the NDAA. Here's the text from the manager's amendment.ARI statement:https://t.co/j5UP0NYbJL pic.twitter.com/kyYMWJU2ScSeptember 2, 2025
"Advanced AI chips are the jet engine that is going to enable the U.S. AI industry to lead for the next decade," said Brad Carson, president of Americans for Responsible Innovation (ARI). "Globally, these chips are currently supply-constrained, which means that every advanced chip sold abroad is a chip the U.S. cannot use to accelerate American R&D and economic growth. As we compete to lead on this dual-use technology, including the GAIN AI Act in the NDAA would be a major win for U.S. economic competitiveness and national security."
This GAIN AI Act demands developers of AI processors, such as AMD or Nvidia, to give U.S. buyers the first opportunity to purchase advanced AI hardware before selling to adversaries like China. To do so, the Act proposes to establish export controls on all 'advanced' GPUs (more on this later) to be shipped outside of the U.S. to countries of concern and deny export licenses on the 'most powerful chips.'
To get the export license, the exporter must confirm to certain conditions:
- U.S. customers received a right to decline first;
- There is no backlog of pending U.S. orders;
- The intended export will not cause stock delays or reduce manufacturing capacity for U.S. purchasers;
- Pricing or contract terms being offered do not favor foreign recipients over U.S. customers;
- The export will not be used by foreign entities to undercut U.S. competitors outside of their domestic market.
If one of the certifications is missing, the export request must be denied, according to the proposal.
What is perhaps no less important about the act is that it sets precise criteria of what U.S. legislators consider 'advanced integrated circuit,' or advanced AI GPU. To qualify as 'advanced', a processor must meet any one of the following criteria:
- Offers a total processing performance (TPP) score of 2400 or higher, which is counted as listed processing power in TFLOPS multiplied by the length of operation (e.g., TFLOPS or TOPS of 8/16/32/64 bits) without sparsity. Processors with a TPP of 4800 or higher are considered too powerful to be exported to countries of concern (although this part is mentioned in the explanatory section of the proposal, not in the action section).
- Offers performance density (PD) metric of over 3.2. PD is counted by dividing TPP by the die area measured in square millimeters.
- Has DRAM bandwidth of over 1.4 TB/s, interconnect bandwidth of over 1.1 TB/s, or combined DRAM and interconnect bandwidth of over 1.7 TB/s.
Essentially, the legislators plan to export control all fairly sophisticated processors, including Nvidia's HGX H20 (due to its high memory bandwidth) or L2 PCIe (due to its high performance density), which is now about two years old. As a result, if the proposed bill passes as a law and is signed by the President, then it will again restrict sales of AMD's Instinct MI308 or Nvidia's HGX H20 both to all customers outside of the U.S. Furthermore, GPUs with a TPP of 4800 or higher will be prohibited for exports, so Nvidia will be unable to sell its H100 and more advanced GPUs to countries of concern or countries that have close relationships with such countries as even H100 has a TPP score of 16,000 (B300 has a TPP score of 60,000).
Coincidentally, Nvidia on Wednesday issued a statement claiming that shipments of its H20 to customers in China do not affect its ability to serve clients in the U.S.
"The rumor that H20 reduced our supply of either H100/H200 or Blackwell is also categorically false — selling H20 has no impact on our ability to supply other NVIDIA products," the statement reads.
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Edit 9/4/2025 6:18 pm ET: Clarified that the restrictions are not placed on allied countries.
