This article first appeared on GuruFocus.
The White House is now signaling a shift that could be meaningful for Nvidia (NASDAQ:NVDA), urging lawmakers to reject the GAIN AI Act just as the debate over America’s semiconductor controls enters a new phase. After weeks of lobbying from Nvidia’s leadership, officials in Washington are suggesting that the bill’s America first chip allocation system may not be necessary, especially as the company insists domestic buyers are not facing shortages. That stance, while not a formal endorsement, could be interpreted by investors as a possible guardrail against a policy that would have barred Nvidia and AMD from selling their most advanced AI products to China and other restricted markets.
But in the background, a second proposal is taking shape that could reshape expectations just as quickly. Lawmakers are advancing the SAFE Act of 2025, a measure that would legally require the Commerce Department to deny export approvals for any AI chips more powerful than the currently allowed H20 over a 30-month period. The effort reflects a wider appetite in Congress to play a more decisive role in semiconductor export policy, especially after several rounds of tightening under President Donald Trump. The act also intersects with recent discussions around downgraded Blackwell chips and whether they could be shipped to China under certain conditions, illustrating how quickly US policy could pivot as the geopolitical and commercial landscape evolves.
For Nvidia, the long-term trajectory of its China business remains an open question. The company is still navigating controls first imposed in 2022 and repeatedly adjusted since, including the recent restriction on H20 shipments that was later paired with a revenue-sharing approval arrangement that has not been codified. Treasury Secretary Scott Bessent has floated the possibility that Blackwell-class chips could eventually be sold to China once they are no longer Nvidia’s most advanced offering, while Chinese authorities have been discouraging domestic firms from using even the chips Washington currently permits. CEO Jensen Huang reinforced that uncertainty this week, explaining that Nvidia’s forecast for China revenue is now zero and noting that the company would welcome the chance to reengage the market if conditions allow. For investors, the next few weeks of legislative maneuvering may be the clearest signal yet of how Washington intends to balance national security aims with the commercial realities of the world’s most valuable chipmaker.