Early reactions to a proposal from House China select committee Chairman John Moolenaar (R-MI) on controlling AI chip exports to China include praise from a tech group that also urges the Trump administration to act quickly on a replacement for the Biden-era “AI diffusion” rule, while security advocates are renewing calls for strict prohibitions on such sales.
“Attempting to engender a long-term, easily controllable dependency that China desperately wants to avoid is unlikely to succeed,” said Jack Burnham of the Foundation for Defense of Democracies. “Instead, the United States should focus its efforts on preventing Beijing from gaining access to any American AI chips, which the CCP will use to further its military modernization and strengthen its economy.”
Moolenaar, a leading China hawk, on Aug. 25 unveiled a proposal to govern advanced artificial intelligence chip sales to China through a “rolling technical threshold” that would define covered chips and new steps to limit China’s aggregate compute power.
Moolenaar said in an Aug. 25 letter to Commerce Secretary Howard Lutnick: “I write to propose a concrete, practical way for the Department of Commerce and the Bureau of Industry and Security (BIS) to balance the desire to keep China dependent on U.S. hardware and limit China’s advanced AI capabilities: a rolling technical threshold (RTT) for sales of advanced U.S. AI chips to China based on the current AI relevant technology paired with a limitation on China’s aggregate computing power.”
President Trump recently confirmed that U.S. chipmakers NVIDIA and AMD would be allowed to sell advanced chips to China in exchange for paying the government 15 percent of the revenue from those sales. The move was denounced by congressional Democrats and some industry security leaders.
Paul Lekas, senior vice president of the Software & Information Industry Association, said, “Rep. Molenaar's proposal, focused on aggregate compute over types of chips, is an innovative approach to balance interests in advancing adoption of US AI technology while recognizing the inherent national security risks associated with diffusion.”
“At the same time,” Lekas said, “the Commerce Department should remain focused on removing barriers that hinder the adoption of U.S. AI technology globally,” a point stressed throughout the tech sector in response to the administration’s AI action plan and other moves.
Lekas emphasized two priorities for the sector, saying, “The Department should act expeditiously to replace the Biden-era Diffusion Rule and implement a fast-track process to enable construction of data centers abroad.”
The Commerce Department’s Bureau of Industry and Security formally announced withdrawal of the “AI diffusion rule,” released on an interim basis at the end of the Biden administration, before it took effect May 15. The complexity of the diffusion rule was widely criticized by industry groups.
FDD’s Burnham said, "Rep. Moolenaar is right to be concerned that China remains a key competitor to the United States in the race to develop and deploy frontier AI models.”
But Burnham, who was sharply critical of the Trump administration’s decision to loosen controls on sales of the NVIDIA H20 chip to China, said the approach spelled out by Moolenaar does not address the Chinese objectives that are raising the security concerns.
“Beijing has no long-term interest in allowing the United States to remain its main chip provider, even if certain Chinese firms may seek to purchase or rent American technology rather than rely on lower-quality domestic substitutes,” Burnham said.