In the wake of the DeepSeek rout of U.S. technology stocks, Republican Senator Josh Hawley wants to stop chipmakers like Nvidia (NVDA) and AMD (AMD) from selling any more AI-related products to China.
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The China hawk introduced legislation to protect America’s AI leadership and technology from being used by Beijing or Chinese companies, at the same as President Donald Trump is reportedly considering tightening restrictions on NVDA’s sales of its H20 chips for the China market.
Both these moves come after DeepSeek’s R1 low-cost AI model spooked investors in U.S. technology stocks this week, as it signalled AI could be developed a lot more cheaply than previously thought.
However, concerns have been raised about the veracity of DeepSeek’s claims and the extent to which it may have improperly obtained data from Microsoft-backed OpenAI. Politicians are also fearful about the U.S. surrendering leadership on AI to China.
Bill to Ban AMD, NVDA from China AI Chip Sales
Announcing the bill, the Decoupling America’s Artificial Intelligence Capabilities from China Act, Senator Hawley said DeepSeek was harvesting data and that “every dollar and gig of data” that goes to Chinese AI development will “ultimately be used against the United States.”
In a post on X, he questioned why the U.S. is allowing tech giants like Microsoft (MSFT) to help China AI. “It’s insane,” he wrote, and called for an immediate ban on the transfer of AI technology.
MSFT said yesterday that DeepSeek R1 is now available on its Azure AI Foundry and GitHub, at the same as it launched a probe into the Chinese company to investigate whether data output from OpenAI’s technology was illegally obtained by a group linked to DeepSeek, according to Bloomberg.
Meanwhile, reports indicate Trump is looking into further restrictions on the sale to Chinese buyers of NVDA’s H20 chips, which are used to run AI software, building on chip export controls introduced under the Biden administration.
Commenting on his anti-China bill, Senator Hawley said, “America cannot afford to empower our greatest adversary at the expense of our own strength. Ensuring American economic superiority means cutting China off from American ingenuity and halting the subsidization of CCP innovation.”
The Decoupling America’s Artificial Intelligence Capabilities from China Act would:
- Prohibit the import from or export to China of artificial intelligence technology;
- Prohibit American companies from conducting AI research in China or in cooperation with Chinese companies; and
- Prohibit U.S. companies from investing money in Chinese AI development.
These provisions would effectively prevent NVDA or AMD, which in October launched an AI chip called the Instinct MI325X to rival Nvidia’s Blackwell, from selling into the Chinese market.
Is NVDA a Good Buy?
Overall, Wall Street remains bullish with a Strong Buy consensus rating on NVDA, based on 37 Buys and three Holds. The average NVDA price target of $178.32 implies 44% upside after the stock took a beating this week.
