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1 month ago
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The US Senate has passed a provision that would give US firms first dibs on advanced chips, just as China tightens customs checks on Nvidia GPUs, leaving the company caught between competing policies across the Pacific.
The Guaranteeing Access and Innovation for National Artificial Intelligence (GAIN AI) Act of 2025 didn't get its own standalone vote in the US Senate, instead being passed as part of the FY 2026 National Defense Authorization Act (NDAA), which scored Senate approval in a vote on Thursday despite opposition from Nvidia, which argued to The Register that the rule was a "self-defeating policy based on doomer science fiction," like the now-terminated AI Diffusion Rule that came before it.
On the other side of the Pacific, China has reportedly taken action to enforce guidance issued in September from the government to cut off the flow of Nvidia AI chips being purchased by firms like Alibaba, ByteDance, and others. According to the Financial Times, Chinese customs officials have stepped up inspections of semiconductor shipments with the aim of restricting imports of Nvidia chips, be they designed for the Chinese market in order to comply with US export control rules or not.
China is moving faster, while the United States is unlikely to pass the GAIN AI Act or the NDAA into law, given the current government shutdown and House Speaker Mike Johnson's (R-LA) insistence that the lower chamber won't return until the Senate passes a bill to fund the US federal government. While the House passed its own version of the NDAA in September, that bill didn't include the GAIN AI Act; both chambers would need to agree to its inclusion to move the bill along, meaning that its future is still uncertain.
China desperate to prove it doesn't need outside chip help
Beijing has recently tightened scrutiny of Nvidia chip imports. Along with customs crackdowns and requests that Sino firms stop buying chips from the GPU giant, China also launched an antitrust investigation into Nvidia late last year. Chinese antitrust regulators have since said that their investigation preliminarily found Nvidia may have violated Chinese law through its 2020 acquisition of networking hardware firm Mellanox.
With Nvidia facing increased heat from US export regulators and a Chinese government increasingly intent on keeping US-made chips out of sensitive AI workloads, companies like Alibaba have turned toward developing their own chips to escape reliance on Nvidia.
- China ramps up semiconductor patents amid US export restrictions
- Huawei's latest notebook shows China is still generations behind in chipmaking
- Export controls now a key factor in AI chip development – adding risk for the whole industry
- Beijing wants Chinese outfits to seek alternatives to US silicon
Like US regulators, Chinese officials are worried that their rival on the world stage could use kit manufactured in a country of concern to spy on the opposition, shut down systems, and otherwise sabotage key computing resources.
Unfortunately for the Middle Kingdom, not all of Chinese firms' efforts to go domestic with their chip supply chains appear to be fully self-reliant, as pointed out by TechInsights last week.
According to the Canadian analytics firm's report, which isn't publicly available but was reported by Bloomberg last week, samples of Huawei's Ascend 910C chips, designed as a Chinese alternative to Nvidia's H100 series, contain a number of foreign-made parts, with components from TSMC, Samsung, and SK Hynix, all found when tearing a 910C apart.
Without debating the veracity of the report, China's Ministry of Commerce added TechInsights to its list of unreliable entities yesterday, barring Chinese companies and individuals from doing any business with the firm, which definitely wasn't a move to prevent another embarrassing teardown. ®
