This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) is walking out of Washington with something that could be a meaningful regulatory win, after US lawmakers opted not to fold the GAIN AI Act into this week’s must-pass defense bill. The proposal would have forced Nvidia and Advanced Micro Devices Inc. to reserve their most advanced AI chips for American buyers before supplying China and other embargoed markets. A person familiar with the deliberations said the measure is not in the final bill, though the landscape could still shift. What’s unfolding is a policy battle shaped by national-security caution on one side and a fast-moving global AI race on the other, with Nvidia arguing the rule could be unnecessary because the company would not hold back US customers seeking high-powered chips.
The decisive moment came as Jensen Huang arrived in Washington for a rapid-fire series of meetings with President Donald Trump and senior lawmakers, saying he was there to answer questions about AI. Afterward, Huang called the omission of the measure wise, going so far as to compare GAIN AI to another policy Nvidia has opposed, warning it could be even more detrimental to the United States. His remarks land at a time when the White House is weighing whether to approve exports of Nvidia’s H200 chipconsidered better than any China-produced alternative and already subject to licensing requirements. Trump has suggested he might be open to exports of a downgraded Blackwell, while some Cabinet officials have resisted. Meanwhile, White House AI czar David Sacks has floated the idea that allowing more American chips into China could be a way to strengthen US technological leadership globally.
But this chapter may not close the story. Lawmakers who backed GAIN AI remain uneasy about the administration’s export posture and could continue pressing for firmer limits, citing the risk that China could use American AI products to advance its economy and military. Their next move is already forming in the Secure and Feasible Exports Act, a proposal that would codify current restrictions on AI chip sales to China. The setback is also notable for some of Nvidia’s largest customers, including Microsoft Corp. and Amazon Corp., which supported the GAIN AI framework as a way to preserve their own access to advanced hardware versus Chinese rivals.