In brief: The US wants American chips firms like Nvidia and AMD to prioritize selling its most powerful AI processors to American companies ahead of foreign buyers, even allies. Unsurprisingly, Team Green isn't happy about such a prospect, calling it "based on doomer science fiction."

This week, the US Senate unveiled the latest draft of the National Defense Authorization Act for Fiscal Year 2026. It included the GAIN AI Act (Guaranteeing Access and Innovation for National Artificial Intelligence Act of 2025), which was originally added as an amendment to the bill last month.

The GAIN AI Act's goal is to ensure that US customers, including small businesses, startups, and universities, are able to obtain the latest AI chips from American firms before overseas customers.

The Act's text states that demand for advanced artificial intelligence chips far exceeds the supply, and those in the United States are forced to wait many months, if not longer, to acquire them.

"At the same time, United States chip developers are selling advanced artificial intelligence chips to entities in countries that are subject to a United States arms embargo or countries that have a close relationship with such countries, so that United States persons are unable to acquire such chips," the bill continues.

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While China and other adversaries are obviously the main countries being referenced in the bill, the act also aims to give US buyers the right of first refusal ahead of all overseas customers, including those from allies in places like the UK and European Union.

The Act seeks to place export restrictions on the most powerful US-made chips. Acquiring a license will require meeting a list of conditions: US customers receiving right of first refusal, no backlog of pending US orders, foreign buyers not receiving advantageous pricing or terms, the exports not being used to undercut US competitors outside their domestic market, and exports not causing stock delays or reducing manufacturing capacity for US purchasers.

Under the proposed criteria, Nvidia's HGX H20, H100, and AMD's Instinct MI308 would fall under the restrictions.

Americans for Responsible Innovation calls the GAIN AI Act a "major win" for US economic competitiveness and national security.

The US government struck a deal with Nvidia and AMD in August that will see Washington take 15% of sales from AI chips sold to China in exchange for export licenses. It encompasses the H20 and MI308 chips. Nvidia said it has yet to ship any H20s to China because it is still working through "geopolitical issues," which may be related to Beijing telling firms to choose domestic alternatives instead of Nvidia's offerings.

Nvidia posted a message on X stating that H20 sales have not reduced its supply of H100, H200, or Blackwell GPUs, despite reports in the media stating otherwise. It added that offering the H20 does not affect its capacity to deliver other Nvidia products.

Nvidia has since posted a statement opposing the GAIN AI Act. The company says it is comparable to the Biden-era AI Diffusion Rule that was rescinded in May, and part of an attempt to overturn Trump's AI Action Plan.