Did Amazon And Microsoft Just Turn On Nvidia? 2 Big Techs Reportedly Back Team Trump’s Plan To Box Out AI Chipmaker In China

• Microsoft has publicly supported the GAIN AI Act, while Amazon has told Senate staffers in private that they also back it, according to the Wall Street Journal.
• The move comes amid lobbying for favorable policies that can give these companies an edge in the AI race.
• An analyst said the relationship between Nvidia and hyperscalers is becoming increasingly complex.

Two of Nvidia Corp.’s (NVDA) largest hyperscaler customers have reportedly backed the Trump administration’s proposed legislation that would further restrict the company’s chip exports to China. 

A bipartisan bill, called the GAIN AI (Guaranteeing Access and Innovation for National Artificial Intelligence) Act, proposes that a company seeking a license to export advanced AI chips to China and other countries of concern first certify that American companies and startups have priority in acquiring those chips. 

Nvidia and its peer, AMD, have been cut out of the lucrative China artificial intelligence (AI) chip market due to the U.S.’s apprehension about arming China with these high-performance chips and ceding its leadership in the AI arms race. These companies have been among the biggest beneficiaries of the AI revolution since it kicked off in late 2022. Nvidia’s stock is up 39% year-to-date compared to the 105% advance for AMD's stock. 

Teaming Up Against Partner

The Wall Street Journal, citing congressional aides and people familiar with the matter, has reported that Amazon and Microsoft have sided with the government as they compete for favorable policies to maintain their AI leadership.

Microsoft has publicly supported the act, while Amazon has told Senate staffers in private that it also backs it, according to the Journal. If the bill becomes law, Amazon and Microsoft—the two largest public cloud vendors—would receive preferential access to Nvidia chips. 

“Usually the tension between hyperscalers and Nvidia is about the product itself and pricing,” according to Futurum Group’s lead semiconductor analyst Ryan Wang, as reported by WSJ. “Right now that tension is getting more complicated.”

Sources told the WSJ that other major tech companies, including Alphabet (GOOG) and Meta (META), as well as President Donald Trump, have not yet taken a stance on the GAIN AI Act. That said, Nvidia has no bones about its opposition to the Act.  Speaking to Reuters in early September, a Nvidia spokesperson said, “We never deprive American customers in order to serve the rest of the world. In trying to solve a problem that does not exist, the proposed bill would restrict competition worldwide in any industry that uses mainstream computing chips.”

A Test For Street Savvy Huang

Congress is reportedly considering whether to include the act as an amendment to the National Defense Authorization Act, which the president typically considers by the end of the year. The Act has received support from top Democratic lawmakers, including Senate Minority Leader Chuck Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.). However, it still needs to gain the approval of Senate Banking Committee Chair Tim Scott (R-S.C.) and top House Republicans. 

According to the Journal, the Act will test the influence of Nvidia CEO Jensen Huang, who has been vocal about creating a level playing field for U.S. companies by allowing them to compete in the Chinese market. Huang was seen hobnobbing with Trump at the White House in the past, and the executive announced the government's commitment to resume China-specific H20 AI chip exports earlier this year, before the Commerce Department confirmed the development.

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