Chip wars: Bill moved in US to ban AI chip sales to China over national security

House Democrats on Thursday (Dec 18) moved a bill that seeks to ban the sale of advanced AI chips to China on national security grounds, marking another potential escalation in the ongoing chip war between the US and China. The bill was introduced by Representative Gregory W Meeks, the Ranking Member of the House Foreign Affairs Committee. Here is what you should know.

What is the US bill on banning AI chip sales to China?

The bill is known as the RESTRICT Act, short for the Restoring Export and Security Trade Restrictions for Integrated Circuit Technologies Act. It aims to restrict the export of advanced US artificial intelligence technologies to China and other countries viewed as security risks. Joined by 13 House Democrats, Meeks presented the measure as legislation designed to protect US national security and preserve American leadership in artificial intelligence.

What will the RESTRICT Act prohibit if it is passed?

The bill proposes to ban the sale of the most advanced US-made AI chips, including Nvidia’s H200, to China and other “countries of concern”, defined as nations subject to a US arms embargo as of 1 January 2025. Export licence applications for advanced integrated circuits destined for these countries would be denied by the US Department of Commerce.

Criticism of Trump’s plan to allow H200 AI chip sales to China

While introducing the bill, Meeks criticised President Donald Trump’s decision to allow the sale of H200 chips to China, arguing that it puts national security at risk and undermines US dominance in the global AI race. He said that providing advanced AI capabilities to a ‘chief strategic competitor’ could strengthen China’s military and malign influence capabilities. Meeks added that the legislation would block such sales while supporting American companies in competing globally across the AI technology stack.

The RESTRICT Act does not introduce new export controls

The Act does not create new export controls but instead codifies existing restrictions on advanced integrated circuits and related products. Its stated aim is to provide clarity and consistency in export policy while reinforcing national security safeguards.

The bill would also establish a secure, licence-free export pathway for trusted American companies operating data centres abroad. The Commerce Department would be required to publish rules covering physical security, cyber security, remote access security and other requirements that firms must meet to qualify for licence-free transfers. Eligibility would be limited to US-owned facilities located outside countries of concern.

After two years, the definition of an “advanced integrated circuit or product” could be revised, provided Congress is certified that any changes would not harm US national security.

The ongoing chip war between the US and China

The bill comes amid an intensifying technology rivalry - known as chip war - between the US and China. The US has imposed controls on the export of advanced semiconductors, chipmaking equipment and related technologies to China, fearing that these could be used by its military and threaten US national security. In response, China introduced its own controls on critical materials like rare earth elements. China is racing to build semiconductor making capabilities domestically. There have been a series of bans, tighter regulations and policy revisions over chips in the recent years.