Amazon, Microsoft Back Initiative to Restrict Nvidia’s AI Chip Exports to China

In a rare rift between the chipmaker and two of its largest clients, Amazon is joining Microsoft in endorsing legislation that might further restrict Nvidia's exports to China. The actions taken by Amazon and Microsoft to oppose a business with which they have a close relationship demonstrate how intense the competition for artificial intelligence is. To keep ahead of the competition, the corporations are all vying for favourable policies. Despite security worries, Nvidia is battling for access to the lucrative Chinese market.

Before shipping chips to China and other nations under arms embargoes, the law would force semiconductor companies to meet U.S. demand. Addressing chip exports, which are essential for the data centres that train AI models, is one of Congress's initial initiatives.

Microsoft openly supported the Gain AI Act, a piece of legislation. According to legislative aides and sources with knowledge of the situation, officials at Amazon's cloud division have quietly informed Senate workers that they support it as well. Tech companies like Amazon and Microsoft would get priority access to chips at their data centres worldwide under the arrangement.

The Move will Change the AI Chip Dynamics in USA

Despite criticism from some White House officials, Nvidia, and other semiconductor businesses, experts think the act might benefit from the support of two of the largest tech corporations in the world. According to multiple media reports, the idea is also being supported by Anthropic, a leading AI model provider that often favours export limits and employs processors from Nvidia, Amazon, and Google. The National Defence Authorisation measure normally reaches the president's desk by the end of the year, and Congress is considering whether to change it to add the measure.

Although the strategy has gained the support of important Democrats, such as Senate Minority Leader Chuck Schumer (D., N.Y.), it is still likely to require the agreement of top House Republicans and Senate Banking Committee Chair Tim Scott (R., S.C.) in order to proceed. Nvidia has increased its lobbying efforts this year, and CEO Jensen Huang often discusses AI policy with Trump. According to data provider OpenSecrets, it spent almost $3.5 million in the first three quarters of 2024, up from $640,000 for the entire year.

Nvidia's power in Washington is being put to the test by the Gain AI Act. Tech firms and other reliable organisations would be excluded from the requirement for government-approved export licences for shipping chips to countries like the Middle East. Amazon and Microsoft, who have experienced difficulties in obtaining export licences, have been won over by that clause and could potentially outperform rivals.

Nvidia’s Response to the Developments

About 80% of the market for AI processors is controlled by Nvidia, the leading chip designer in the world. Customers have rarely expressed public disapproval of the business or taken stances against its policies.

According to Nvidia and other chip manufacturers, the act would amount to needless interference in the semiconductor industry, perhaps leading to additional export limitations. According to tech CEOs, power is the primary barrier in the AI business, and the United States has adequate chips. At a conference last month, Microsoft's general manager of U.S. public policy, Gerry Petrella, stated that the policy was "really positive".