In a move drawing considerable attention across the tech industry, Nvidia Corporation has publicly critiqued the recently proposed Gain AI Act, emphasizing its potential to stifle competition in the rapidly evolving artificial intelligence sector.

The GAIN AI Act, which stands for Guaranteeing Access and Innovation for National Artificial Intelligence Act, was introduced as part of the U.S. National Defense Authorization Act, with the goal of ensuring that the United States is the dominant market force for AI.

It has not yet passed and remains a hotly debated policy topic both here and abroad because of the restrictions it looks to enact.

Backers say it aims to protect American market interests by prioritizing domestic orders for advanced AI chips and processors, as well as secure supply chains for critical AI hardware, and theoretically reduce our reliance on foreign manufacturers.

So it’s no huge surprise that Nvidia, a Chinese corporation and currently the world’s biggest company, would take aim at a law that might potentially restrict the competitiveness of foreign technology.

The company said as much during a recent industry forum.

“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,” an Nvidia spokesperson said.

Is the Gain AI Act a good idea for innovation?

It depends on who you ask.

Essentially, the law seeks to strengthen national security and economic competitiveness by ensuring that key AI components remain accessible to American companies and government agencies before they are supplied abroad.

Its language takes a hard line on what the priority should be for the United States government.

“It should be the policy of the United States and the Department of Commerce to deny licenses for the export of the most powerful AI chips, including such chips with total processing power of 4,800 or above and to restrict the export of advanced artificial intelligence chips to foreign entities so long as United States entities are waiting and unable to acquire those same chips,” the legislation reads.

Nvidia’s critique reflects broader industry anxieties about regulatory environments that might hinder innovation. As global competition intensifies, particularly with formidable advances in AI from regions such as China, firms like Nvidia are closely watching how regulatory frameworks are taking shape abroad.

But it’s not just foreign companies. American market players, too, have said it could hit many domestic operations hard.

“Advanced AI chips are the jet engine that is going to enable the U.S. AI industry to lead for the next decade,” Brad Carson, president of Americans for Responsible Innovation (ARI), a lobbying group for the AI industry, said in a widely distributed statement.

“Globally, these chips are currently supply-constrained, which means that every advanced chip sold abroad is a chip the U.S. cannot use to accelerate American R&D and economic growth,” Carson said. “As we compete to lead on this dual-use technology, including the GAIN AI Act in the NDAA would be a major win for U.S. economic competitiveness and national security.”

‘Doomer science fiction’

Nvidia didn’t stop there. It then took aim at an earlier attempt to make the U.S. more competitive in the chipmaker market, a policy called the AI Diffusion Rule, which ultimately failed.

The company minced no words in a follow-up statement, saying that the past attempts by legislators to control market forces based on protectionist policies was ultimately a bad idea.

“The AI Diffusion Rule was a self-defeating policy, based on doomer science fiction, and should not be revived,” it read.

“Our sales to customers worldwide do not deprive U.S. customers of anything—and in fact expand the market for many U.S. businesses and industries,” it said. “The pundits feeding fake news to Congress about chip supply are attempting to overturn President Trump’s AI Action Plan and surrender America’s chance to lead in AI and computing worldwide.”

The challenge will be creating laws that are as dynamic as the technologies they aim to govern, fostering a climate where innovation and ethical accountability are not mutually exclusive, but rather mutually reinforcing.

We’ve tried this before

Nvidia’s mention of the AI Diffusion rule was no accident. That ill-fated policy had many of the same political goals but ultimately stumbled at the finish line and was a relatively toothless attempt to rein in some of the world’s most competitive companies.

The Biden administration’s AI Diffusion rule, enacted in January 2025, represented a significant shift in U.S. export controls targeting cutting-edge artificial intelligence technology.

Designed to curb the spread of advanced AI tools to rival nations, the regulation mandated licensing for the sale of high-end AI chips and imposed strict caps on computing power accessible to foreign recipients. Its goal was to slow the diffusion of sensitive AI capabilities that could enhance military or strategic applications abroad.

However, the Trump-era approach to export controls, which focused on a more targeted, bilateral framework, was poised to replace the Biden administration’s broader strategy.

President Trump had announced plans to rescind the AI Diffusion rule, criticizing it as overly bureaucratic and potentially hindering U.S. innovation. Instead, his administration favored engaging in country-specific agreements to control export practices, aiming for a more adaptable, case-by-case approach.

Though the AI Diffusion rule was ultimately rolled back, the Bureau of Industry and Security (BIS) signaled a renewed emphasis on enforcing existing regulations. The agency issued a notice reinforcing actions against companies with a “high probability” of violations, warning that increased scrutiny would be applied to entities with knowledge of potential breaches.

Whether this latest attempt to advance American interests meets a similar fate remains to be seen.