NVIDIA Corp. (NASDAQ:NVDA) warned on Friday that proposed Congressional legislation could undermine its global competitiveness, creating tension with President Donald Trump‘s recent export deal allowing chip sales to China.
Check out the current price of NVDA stock here.
GAIN Act Prioritizes Domestic Orders
The Guaranteeing Access and Innovation for National Artificial Intelligence Act was introduced as part of the National Defense Authorization Act and stipulates that AI chipmakers prioritize domestic orders for advanced processors before supplying them to foreign customers.
The legislation mandates Commerce Department denial of export licenses for “the most powerful AI chips, including such chips with total processing power of 4,800 or above,” while U.S. entities await chip deliveries.
Nvidia Disputes Need for Restrictions
An Nvidia spokesperson rejected the bill’s premise on Friday, according to a Reuters report. “We never deprive American customers in order to serve the rest of the world. In trying to solve a problem that does not exist, the proposed bill would restrict competition worldwide in any industry that uses mainstream computing chips,” the company stated.
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Nvidia said the AI GAIN Act would “restrict global competition for advanced chips, with similar effects on the U.S. leadership and economy as the AI Diffusion Rule.”
Trump’s Revenue-Sharing Deal
Trump’s August agreement with Nvidia and Advanced Micro Devices Inc. (NASDAQ:AMD) requires both companies to pay the U.S. government 15% of their AI chip sales revenue to China in exchange for export licenses.
Strategic Competition Concerns Drive Policy
Both the AI Diffusion Rule and the GAIN Act are part of Washington’s push to put American interests first by making sure U.S. companies get advanced chips before others, while also blocking China from getting top-tier tech over concerns it could boost its military with AI, according to the report.
Tech Companies Look for Alternatives
As policy pressure grows, companies like OpenAI are already making moves. Its partnership with Broadcom Inc. (NASDAQ:AVGO) to develop custom AI chips shows that major players may be looking to reduce dependence on Nvidia’s GPUs and gain more control over their own computing infrastructure.
NVDA stock dropped 2.70% to $167.02, and according to Benzinga's Edge Stock Rankings, the California-based company shows strong Momentum 88.69, Growth 97.82, and Quality 93.45 scores. Track the performance of other players in this segment.
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