Senate Prioritizes National Security Over Tech Firms in GAIN Act Passage

The U.S. Senate has advanced the Guaranteeing Access and Innovation for National Artificial Intelligence (GAIN) Act as part of the 2026 National Defense Authorization Act (NDAA), marking a pivotal step in efforts to secure American technological leadership and curb advanced chip exports to China and other adversaries. The bipartisan measure, sponsored by Senator Jim Banks (R-IN) and Senator Elizabeth Warren (D-MA), mandates that U.S. chipmakers prioritize domestic orders for high-performance AI processors before exporting to countries deemed national security risks . The provision, which faces an uncertain path to law, has drawn fierce opposition from tech giants like Nvidia and AMD, who argue it will stifle innovation and competition .

The GAIN Act introduces stringent export controls, requiring chipmakers to obtain licenses for advanced processors and ensuring U.S. customers have "right of first refusal" for high-performance chips. Specifically, the act targets integrated circuits with processing capabilities exceeding defined thresholds, such as total processing performance of 4,800 or above . Export licenses would be denied unless companies certify they have fulfilled domestic demand and are not offering preferential pricing to foreign buyers . The legislation also empowers the Department of Commerce to restrict exports to countries hosting military or intelligence facilities linked to adversaries like China or Russia .

Supporters, including Americans for Responsible Innovation President Brad Carson, frame the act as critical to safeguarding U.S. economic and national security. "Every advanced chip sold abroad is a chip the U.S. can't use to accelerate American R&D and economic growth," Carson stated . Proponents argue that current supply constraints force American businesses to wait months for cutting-edge chips, while competitors in China and other nations gain access to the same technology .

However, industry leaders have pushed back. Nvidia, whose U.S. sales account for nearly half its revenue, criticized the bill as an overreach that creates unnecessary barriers. A company spokesperson called the legislation an attempt to "solve a problem that does not exist" and warned it would restrict global competition . AMD and the Semiconductor Industry Association have similarly lobbied against the measure, arguing it could undermine the U.S. chip industry's competitiveness .

The GAIN Act's inclusion in the Senate's NDAA follows a contentious monthlong debate and comes amid broader trade tensions. The Trump administration's recent reversal of Biden-era export controls, including the AI Diffusion Rule, has further complicated the landscape . While the Senate approved the bill, the House previously passed its version of the NDAA without export restrictions, necessitating negotiations in a conference committee. Lawmakers must now reconcile differences, with no guarantee the GAIN Act will survive in its current form .

The legislation also intersects with rising tariffs on crypto mining hardware, which have exposed U.S. firms like CleanSpark and IREN to multi-hundred million-dollar liabilities. Tariffs of up to 57.6% on Chinese-origin mining rigs and 21.6% on Southeast Asian imports have already strained supply chains, and the GAIN Act's export restrictions could exacerbate hardware shortages for the crypto industry . Companies reliant on international supply chains, such as Bitmain and Canaan, are now expanding U.S. operations to navigate trade barriers, signaling a broader shift in manufacturing strategies .

As the debate unfolds, the GAIN Act underscores the tension between national security imperatives and economic realities. While supporters emphasize the need to protect U.S. technological advantages, critics warn of unintended consequences, including reduced innovation and higher costs for American businesses. The outcome of congressional negotiations-and potential executive actions-will determine whether the act becomes a cornerstone of U.S. tech policy or a casualty of partisan and industry pressures.

[1] Senate Passes AI Chip Export Limits on Nvidia, AMD to China (https://www.bloomberg.com/news/articles/2025-10-10/senate-passes-ai-chip-export-limits-on-nvidia-amd-to-china)

[2] Senate Passes GAIN Act as Part of 2026 National Defense (https://cointelegraph.com/news/senate-passes-gain-act-prioritizing-domestic-hpc-ai-sales)

[4] S.Amdt.3505 to S.2296 - 119th Congress (2025-2026) (https://www.congress.gov/amendment/119th-congress/senate-amendment/3505/text)

[5] What is the GAIN AI Act and Why Does Nvidia Oppose it? (https://aimagazine.com/news/what-is-the-gain-ai-act-and-why-does-nvidia-oppose-it)

[6] US Tariffs on Bitcoin Mining Rigs Surge, Leaving CleanSpark and ... (https://cryptopreneurial.com/2025/08/21/us-tariffs-on-bitcoin-mining-rigs-surge-leaving-cleanspark-and-iren-facing-massive-liabilities/)

[14] US Tariffs on Crypto Mining Machines: What's Happening in 2025 (https://refined-capital.com/us-tariffs-on-crypto-mining-machines/)