▶ 0:08:38Heat. Heat.
▶ 0:09:09Happy birthday. I saw it this morning.
▶ 0:09:14Committee on Foreign Affairs will come to order. I'm going to ask everybody please rise. Join me in the pledge of
▶ 0:09:25I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Good morning everybody. Good morning to our witnesses.
▶ 0:09:50The purpose of today's hearing is to understand the importance of winning the AI arms race against the Chinese Communist Party and explore ways to ensure America dominates the defining technology of the 21st century. And I'm now going to recognize myself for an opening statement. Actually, I'm going to do unanimous consent first.
▶ 0:10:12Uh I do ask unanimous consent that the chairman of the house committee on intelligence and representative Crawford and representative Mulinar of Michigan be allowed to sit on the dis and participate in today's hearing without objection. So ordered. Winning the AI arms race is key to America's national security and our economic security.
▶ 0:10:38The outcome of this race, it directly affects military competitiveness of the United States of America versus China. It is that black and white. And because AI works to improve other AI, this is a very unique race where the further you get ahead, the further you get ahead. This committee worked hard to get smart on all things AI, otherwise known as the AI stack.
▶ 0:11:06We've heard from those who make chips, those who make the machines that make chips, those that model chips, those that use chips, and that will continue through the next year. It is a fact that the AI arms race directly impacts our military competitiveness with China. That cannot be disputed. Among many capabilities, advanced AI enables military command and control. AI powers intelligence. AI powers surveillance. It powers cyber operations.
▶ 0:11:36AI powers analysis and data crunching. It powers autonomous weapons and nuclear modernization. AI dominance can decide who sees first, who decides first, and who strikes first. Those are some of the stakes. The United States of America is in the lead. We have an advantage over China. We know the pitfalls if China has an advantage over us. But in this circumstance, we have a clear advantage.
▶ 0:12:08That advantage did not happen by accident. America has amazingly creative people in amazing companies that innovate and continue to further advance the capabilities within our borders and beyond in AI and a thousand other Right now, America is ahead. Right now, chips made by American companies are the best in the world. Right now, America's cloud companies power AI worldwide. Right now, our models dominate global markets.
▶ 0:12:39That dominance is because of our nation's inventors and thinkers and But that dominance cannot be taken for granted as China tries to catch up. Why? Because these chips, they're not just kids playing video games on an Xbox, playing war games. They affect real wars, real weapons, real war powers, and they will be a part of bringing about real casualties.
▶ 0:13:11If anything, this is the highest of Nvidia has made such good chips that if they were sold freely to the CCP, the CCP would likely overtake us in the AI arms race. Nvidia's chips are so much better than what China can make themselves that Chinese AI labs desperately want as many of these chips as they can get their hands on. That's a quantifiable fact.
▶ 0:13:40And Xi Jinping hates how badly that they need our chips. The evidence is already clear. When President Trump first imposed export controls back in 2019 by blocking the most advanced chipmaking tools to China, our lead grew. Why? Because China cannot produce cutting edge AI chips at scale. They can't do that. What does that mean?
▶ 0:14:07It means number one, their chips are crappy compared to what Jensen Wang makes. And number two, if they try to make a hundred of them, they're lucky if they get 30 of them to work. China is doing everything that they can to catch up and dominate us. So instead of our cloud companies dominating global markets, it would be China.
▶ 0:14:31Make no mistake, if China buys a chip, they are buying it so they can take it from an American company or they are buying it to put to put a Chinese company ahead of an American company or they are buying it to make the Chinese military better than the United States military. That is their goal. Instead of the US military having the AI advantage, the Chinese military would have the AI advantage.
▶ 0:14:57Just this month, Secretary of War Pete Hgsth announced the Department of War's AI strategy that said point blank, "AI will redefine the character of war over the next decade." Our Secretary demands 21st century technological supremacy in AI, hypersonics, and drones. Our oversight needs to keep pace with the challenge we are facing.
▶ 0:15:21That is why I wrote a bill called AI Overwatch that ensures our cutting edge AI chips cannot be used by the Chinese military. It is modeled after what we already do on foreign military sales. The principle is the same. When an export shifts America's military advantage, Congress has a role to play. Advanced chips absolutely shift military advantage.
▶ 0:15:47AI overwatch would include chips with those same guardrails and those in future advanced chips. As chairman of the House Foreign Affairs Committee, I have to review all military sales. When it comes to who we sell a fighter jet to, or who we might sell a fighter jet engine to, or a missile that would go on the wing of a fighter jet, or the avionics for a fighter jet, we review all of those things.
▶ 0:16:14If there is a potential sale of a military enabling chip to anybody, Congress needs to have oversight of that. When we are talking about what's going on with AI, chip dominance, cloud dominance, model dominance, we're talking about private companies in places like China that are purchasing chips for applications that will ultimately assist militaries of our foreign adversaries.
▶ 0:16:44Not every chip sale is a military sale. Many of them are. When we're talking about chip sales, we're talking about private companies in many cases like Deepseek or Alibaba or Tencent among others that are direct contractors working for the Chinese Communist Party, working to advance military dominance, working for the Chinese military, working to make their military more by buying our chips.
▶ 0:17:15It's that it's not complicated. It's that simple. Should Congress have oversight when selling missiles to other countries? Yes. The same should be said for chips. We want to enable the greatest AI cap capabilities for the United States. The Secretary of War laid it out plain for AI acceleration in the 21st century. 21st century technological supremacy. That is what AI overwatch is about. That is what this hearing is about.
▶ 0:17:42AI acceleration strategy for America for the 21st century for supremacy for America. I want to thank our witnesses for joining us today. Your insights will help us fight this fight and I look forward to today's discussion. That being said, I now recognize Do you have a statement and opening statement? You have no
▶ 0:18:04Mr. Meeks will deliver one when he returns. Very good. Other members of the committee are reminded that opening statements may be submitted for the record. We are pleased to have a distinguished panel of witnesses before us today on this important topic. Mr. Matt Pottinger, former deputy US national security adviser who led President Trump's export control strategy during the first Trump Mr. Orin Cass, founder and chief economist at American Compass.
▶ 0:18:35And Mr. John Feiner, former principal deputy US national security adviser who served during the Biden administration. This committee recognized the importance of the issues before us and is grateful to have you here to speak with us today. Your full statements will be made a part of the record and I'll ask each of you to keep your spoken remarks as close to 5 minutes as you can in order to allow time for member questions. And that Mr. Pottinger, I now recognize you for any opening statement that you may have.
▶ 0:19:04Chairman Mast [clears throat] and Ranking Member Meeks and distinguished members of the committee. I'm really privileged to testify today. Um I'd like to spend just a few minutes dispelling some of the myths that have misled our government down the wrong path in our competition with China on artificial intelligence. But first, I just want to say a word about what's at stake. Imagine if the question before you today was whether to sell China the propulsion systems that make our nuclear submarines stealthy.
▶ 0:19:33Or to debate whether to sell China a prototype of our F-47 fighter so that they could reverse engineer it or to help Beijing paralyze our power grids through cyber attacks. We'd all laugh at the premise that there's anything to debate. Yet, the United States has effectively taken a step toward all those outcomes and more by relaxing export controls and preparing to sell China the advanced chips that they need to try to surpass us in artificial intelligence. The security implications are clear.
▶ 0:20:03Selling Nvidia's H200 chips to China will supercharge Beijing's military modernization, enhancing capabilities in everything from nuclear weapons to cyber warfare, autonomous drones, biological warfare, and intelligence. and influence operations. It'll also help China's subsidized companies compete with American AI developers, putting at risk hundreds of billions of dollars in US investment at precisely the moment that transformational capabilities are emerging.
▶ 0:20:33And AI isn't just a pivotable a pivotal technology. It is the pivotal technology that will determine whether the United States and its allies or an axis of totalitarian regimes lead in virtually all technologies, military and commercial. President Trump has made clear he wants to win this competition.
▶ 0:20:55His team, however, may not be aware how damaging the administration's decision to sell China's H2 sell to China H200 is to that goal. The first task is to obliterate faulty arguments that have put US policy on the wrong track. Myth number one is that China has nearly caught up to the United States.
▶ 0:21:16AI leadership boils down to who has the best engineers, the most data, the cheapest electricity, the most effective marketing, and crucially, the most powerful computers. China is making strides in most areas, but the United States holds an ace card. We have privileged access to the most powerful chips in the world. American companies design them. Friendly countries like South Korea and Taiwan produce them.
▶ 0:21:43And this is thanks in no small measure to President Trump's groundbreaking export controls in his first term. China's inability to produce advanced semiconductors at scale is the central bottleneck preventing it from overtaking us in AI. Oddly, some people argue that China is catching up so fast that we may as well lift the controls.
▶ 0:22:06Quote, "China is nanosc behind America in AI is how Nvidia's CEO put it last November." But China's own leaders are far less confident. Last April, China's ruler, Cinping, instructed the pilot bureau to quote face up to the gap close quote in core AI technologies.
▶ 0:22:26In December, Beijing set aside nearly $70 billion more for chip subsidies on top of the 145 billion that they've spent over the past decade or so. So, these aren't the actions of a competitor only nanconds behind. They're signs of desperation. Just days ago, a top Alibaba AI scientist in China forecasts that there's only about a 20% chance at best that the world's leading AI company will be Chinese in 5 years.
▶ 0:22:55The chief scientist at another Chinese AI company, Jerpool AI, noted that quote, "The gap may not be narrowing. It might even be widening." Close quote. Leading Chinese chip company Huawei can make only a fraction the number of chips as its closest Western competitor and with only a fraction of the computing power. The second myth is that we can make China addicted to US uh chips. Uh Beijing utterly dismisses that pre that premise.
▶ 0:23:23quote, "Even if we introduce Nvidia chips, our determination to pursue independent innovation will remain unwavering is is how the vice chairman of China's Semiconductor Industry Association put it last week." He continued, quote, "The purpose of importing those chips is to catch up better, and catching up will eventually lead to running alongside or even taking the lead," he said.
▶ 0:23:47In other words, Beijing views Nvidia chips just as a stop gap to help it leapfrog the United Finally, uh, is the myth that we've already lost the AI race. This is in some ways the most dangerous myth. This idea that China's momentum is unstoppable and that America should accept decline. This is defeatism. America still holds the high ground. Our companies designed the world's most advanced chips and they dominate global cloud infrastructure. Here's quickly how to keep it that way.
▶ 0:24:15[snorts] First, let China's leaders struggle to reinvent the wheel. If China wants to spend hundreds of billions of dollars to stay in second place on chipmaking, they should be our guest. The Soviets made the same mistake trying to replicate Ronald Reagan's Star Wars missile defense. Second, reverse the decision to sell China advanced AI chips. Congress needs to put guard rails in place so that this mistake can't be repeated. Third, get our allies to level up.
▶ 0:24:43The Netherlands and Japan still sell advanced semiconductor manufacturing equipment to China long after US firms have been prohibited by Washington from the China market. So, we need to push allies to match our export controls fully. Thanks so much for the opportunity and I look forward to your
▶ 0:24:59Thank you, Mr. Potinger. Thank you, Mr. Cass. I now recognize uh I'm sorry, Mr. Cass. I now recognize you for any opening statement you may have. Good morning, Chairman Mast, ranking members Meek, and members of the committee. Thank you for inviting me to participate in today's hearing. My primary message to the committee is this.
▶ 0:25:25Advanced AI compute is essential to the AI era, enabling both economic dynamism and novel military capabilities. Denying our foreign adversaries access to this resource then is a matter of both geostrategic competition and national security. Now, I should confess that is not my own message. I copied it verbatim from the Trump administration's AI action plan thoughtfully developed when the White House moved through a reasoned policy process last year.
▶ 0:25:53Again, the administration's stated policy, which is exactly correct, is that advanced AI compute is essential to the AI era, enabling both economic dynamism and novel military capabilities. and denying our foreign adversaries access to this resource is a matter of both geostrategic competition and national Consistent with that reality, the Trump administration moved last year to impose robust export controls on advanced AI chips, prohibiting the sale even of Nvidia's less powerful H20
▶ 0:26:23chip, which the Biden administration had intended to license. But we are here today because the administration has inexplicably reversed course and is now poised to begin licensing the sale to China of Nvidia's H200, a far more advanced chip in mass quantities. I I regret to say that US policy has been seemingly reshaped by business executives who promote China as a partner and prioritize short-term profit over the national interest.
▶ 0:26:52Most prominently, Nvidia CEO Jensen Wong has argued that even the term China hawk should be a badge of shame. And he's argued that China's leaders quote want companies to come to China and compete in the marketplace. And that we should take statements by the Chinese Communist Party quote at face value. Of course, under our Constitution, citizens have the right to petition their government no matter how unwise their ideas.
▶ 0:27:17But also under our constitution, it is the people's representatives, not multinational corporations, that set national party, excuse me, that set national policy to ensure that it advances the national interest. When it comes to AI, that process has broken down and Congress must intervene. I had some difficulty preparing this testimony because it is hard to know how to make the case for something so self-evidently true as the proposition that the United States should deny China access to advanced AI chips.
▶ 0:27:47As Chairman Mass just said, it's not complicated. As Mr. Ponder said, we'd all laugh at the premise in almost any other context. But it's worth underscoring exactly why this is the case. First, the total amount of computational power available in a country is quickly becoming a key determinant of its technological capabilities for both economic and military purposes.
▶ 0:28:09As models have come to rely more heavily on inference, meaning the computation required to complete a task, the ability to expand capacity with the fastest, most cost-effective, and most energyefficient chips, has become increasingly vital. Second, as you've heard, the United States holds a decisive advantage over China. Leading edge chip design and manufacturing are controlled by the United States and our allies.
▶ 0:28:32And analysts estimate that export controls imposed by the first Trump administration and extended by the Biden administration helped the United States to build a five-fold advantage in total computational capacity. Third, as investment in AI infrastructure surges, chip manufacturers are struggling to meet demand. Nvidia has repeatedly declared itself quote sold out and customers have faced long wait times.
▶ 0:28:56More recently, the chip on wafer on substrate packaging process and the high bandwidth memory critical for inference have become bottlenecks. Redirecting supply toward China will not only boost its technology sector, but also hamper ours. Thanks to short-sighted action by policy makers and corporations, the United States has already given away leadership in key technologies and supply chains to China.
▶ 0:29:19Our leadership in AI represents a crucial counterveiling advantage that we must leverage if we are to maintain our military superiority and rebuild our industrial base. Blundering instead into exactly the same mistake yet again, like Charlie Brown chasing after Lucy's football, giving away this crucial technology because CEOs believe they can win in China and investors want to make a quick buck would be an unconscionable error of world historical proportions.
▶ 0:29:50Setting export control policy is ultimately the responsibility of Congress. Legislation like the AI Overwatch Act would be an important step forward and is well aligned with the executive branch's AI action plan. Its requirements would ensure that licensing decisions are appropriate. The reasoning is well articulated and the decision makers are accountable to the American people. What is going on now behind closed doors cannot continue. Thank you again for the opportunity to testify and I look forward to your questions. Thank you, Mr. Cass. I now recognize you, Mr.
▶ 0:30:20Finer, for any opening statement that you may have.
▶ 0:30:23Thank you, Mr. Chairman. Uh, Chairman Mast, ranking member, members of the committee, it's an honor to be here with you today in my personal capacity on a matter of such enormous consequence. I've been privileged to serve our country on national security issues for most of the past 17 years.
▶ 0:30:40In that time, I've worked on no issue more important than the competition between the United States and the People's Republic of I actually arrived in Hong Kong in 2001 uh during a time of what felt like great promise. The story since then has become infinitely more complicated and I need not reprise it all here. But suffice it to say, many of the assumptions about China's trajectory and intentions of that period proved wildly optimistic and just plain wrong.
▶ 0:31:10Most consequentially for today's hearing, more than a decade ago, the Chinese government embarked upon a concerted effort to dominate the emerging technologies of the future as well as their supply chains. The goal was to make China less dependent on the rest of the world while making the rest of the world more dependent on China. The PRC's made in China 2025 initiative and related policies were a blue blueprint for achieving technological primacy.
▶ 0:31:36And now that the year 2025 has come and gone, we can see the profound and problematic impact these policies have had all too clearly. Across these areas, where China's trajectory has defied American expectations and challenged important US interests and values, our country has benefited from the emergence of a new bipartisan consensus for which the first Trump administration deserves genuine credit, updating US assumptions and strategies to make competition the hallmark of US policy toward China.
▶ 0:32:05The Biden administration built on key elements of our predecessors approach, including by treating competition with China, particularly in the military and critical and emerging technology domains as a top national security priority. Specifically, the Biden administration supplemented the Trump approach in at least two important ways.
▶ 0:32:24by working with this body to provide infusions of capital to our industrial base and by enhancing our alliance relationships particularly in the Indoacific as a force multiplier for American power and influence. One of the main reasons the United States has been able to mount this meaningful, if much needed, and still unfinished, response to the threats posed by China is sustained strategic and bipartisan policy work across multiple administrations and both the executive and legislative branches of the government.
▶ 0:32:55Ultimate success, however, is far from secure. The stakes of USChina competition have only grown higher and the most hotly contested area determining who eventually prevails will be this intense technology competition between the world's two leading powers and the economic and military strength that flows from it.
▶ 0:33:14Alongside the policy initiatives I've already described to promote American advantage in core areas of technology, the first Trump and Biden administrations also sought to protect America's lead in key areas of this race by placing controls on the most important inputs that fuel it. Advanced semiconductors and the tools needed to fabricate them. Like other areas of economic statecraft, such as sanctions, export controls are not a one-off fix.
▶ 0:33:39They require relentless vigilance, iterative adjustment, and when necessary, escalation. And importantly, they are strongest when both the executive and legislative branches of government reinforce each other's actions to maximum effect. Here again, the first Trump administration deserves credit for taking the first steps with our allies on export controls, and the Biden administration built on this effort, coordinating with allies and partners to impose comprehensive multilateral restrictions on the most advanced chips and tools.
▶ 0:34:10Perhaps the best indication that this approach has generally hit the mark is that in both public statements and private conversations, Chinese officials gradually elevated US technology restrictions from what felt like a secondary concern to the very top of their grievance list alongside core interests such as the future of Taiwan. Over time, the PRC increasingly sought to link such national security issues to other areas of mutual tension such as the various economic and trade disputes between our countries.
▶ 0:34:38a linkage that the Biden administration rejected, adhering to a principle that national security necessities were not up for negotiation. This is particularly true for AI chips, nearly all of which were designed and sold are designed and sold by American companies and the advanced semiconductor manufacturing equipment needed to make them where US, Dutch, and Japanese companies dominate the market. Together, these technologies enable the US's most important remaining advantage in the AI race.
▶ 0:35:06a substantial lead in compute needed to train and operate large language models. China's leaders increasingly see AI as not just one of many technology priorities, but as the critical technology that will enable their economic and military ambition. And I am aware of no evidence that suggests China has any intention of slowing down its breakneck push to indigenize chip production even if and as it acquires more capable US AI chips in the meantime.
▶ 0:35:34So for many reasons, now is not the time to take our foot off the gas or to replicate the sort of complacency and overconfidence of a bygone era. Only this time with far less margin for error and higher stakes. The PRC's success in this race will enable it to extend its military power and influence across the region and beyond in ways enimical to our interests, if not our way of life. Thank you again for the opportunity to explore these issues with you, and I look forward to your
▶ 0:36:00I want to thank you all for your statements. I'm now going to recognize members for questions that they may have. I'm going to begin with myself. I think I may only get through one question, but I I thought it was a great profound story that I had read. Mr. Potinger, you were a reporter in your past life and I know that you spent time reporting on China and Huawei and I think you have a story that is very analogous to what's going on in this about uh telecom companies selling uh to Huawei at the time thinking that they were
▶ 0:36:30going to cut their their legs out from under them so to say. And uh I wonder if you would just share that story because I can't think of a better analogy to really illustrate the the situation I think that we're in.
▶ 0:36:44Chairman Mass, thanks so much. In fact, I I in a previous life I was a reporter uh covering China for the Wall Street Journal at the same time that John Feiner was writing for the the Washington Post in uh in China, which is where we first met. U the uh one of one of the beats that I covered was the telecommunications beat. This was at a time when the United States was absolutely dominant in telecoms.
▶ 0:37:07Uh remember of course Bell Labs which you know invented transistors the the whole computer revolution began uh here in the United States and companies that were spun out of that like Lucent Technologies and Bell Labs were making the telecommunications equipment that that China was importing to build out its uh cell phone networks and the like and they had a dominant lead.
▶ 0:37:29other western companies as well like Nortell networks uh Maronei in the UK you know Motorola used to be in this space you had companies like Alcatel uh in France they're all out of business now they don't exist anymore these were companies that employed hundreds of thousands of people because China used that equipment to leapfrog ahead and destroy uh the their competition and now to monopolize virtually monopolize uh
▶ 0:37:59telecommunications infrastructure. So what they would do is steal IP, subsidize to the tune of uh tens upon tens of billions of dollars uh domestic champions like Huawei and then go compete in in other markets both compete in China but also start out in the global south as we now call it and and go eventually make their way to Europe and and wipe the United States out of the entire business of telecommunications
▶ 0:38:30which is where we are today. The it's I mean without any sense of irony here, it's actually the same Chinese companies that are trying to do the same thing again. It's Huawei that is going to try to destroy uh American chip designers and manufacturers using the same playbook. Suck them in, get their equipment, you use use the the American equipment, subsidize it in order to then start stealing market share around the world uh and then uh destroy their access.
▶ 0:38:59No one gets addicted to the American technology. The policy is to destroy American uh involvement in in that uh in in that whole sector and then and then win the future. So we're watching uh the same bad movie all over again. What would you give simply I mean I think you laid it out but give a lesson learned. What would you uh say to those that are working on AI policy today?
▶ 0:39:24Yeah. First do no harm. there there is no f future for uh any American company in China when when China's national policy is uh to only suck them in as far as they need to to learn, steal, subsidize and then destroy the competition.
▶ 0:39:45So, we should not be selling uh even, you know, uh the the previous generation of uh Nvidia chips, the H20s that Orin was just referring to. Now, now we're going ahead to a far more powerful chip that is uh virtually
▶ 0:40:02So, when they come out with the Reuben chip, we shouldn't step back and start selling Blackwell chips.
▶ 0:40:07The the hundreds of billions of dollars that are going into building this data center, they don't just upgrade to Reuben chips. These are American companies that are spending hundreds of billions of dollars. They're they're investing for the long term in current generation technology. They they can't just throw out uh the data centers that they're investing in now just because a new generation of chip comes out. The we we can see that these incredible advances in AI that are taking place are actually on even older generation chips.
▶ 0:40:37So we we don't want to to just maintain a little marginal lead. We want to absolutely expand, continue to expand our lead uh over the People's Republic of China.
▶ 0:40:48I think this is a a difficult subject. It's not an intuitive subject for most people when you talk about the full stack of AI, right? Unless this is what they went to school for, it's not intuitive. And so if if you can't even see vividly what's directly in front of you with this technology, it's very difficult to understand where the future can be in a year, much less five or 10 years. if you don't have that education in it, that imagination for it.
▶ 0:41:14So take that and and tell me what are the risks that that we face in the future. Where can we get to that most people aren't even tracking that this could bring us to this place in the future?
▶ 0:41:26Yeah, I I think we have to be humble to your point about thinking that we we can see uh how far China could go if it had really advanced chips or or or assume that they can't catch up. uh Gordon Moore, the great genius uh who who helped you know he created Moore's law that said that chips will shrink in size and in and expand exponentially every two years in uh in in power.
▶ 0:41:53I was watching a documentary even he the guy who created in many ways the the computer uh era uh when uh didn't realize that p personal computers were going to become a thing. he was building chips at the time for big mainframes. So I mean the the whole revolution that he uh brought about he couldn't even see the implications right in front of him uh until uh after things started to move.
▶ 0:42:20So uh we don't want to give Beijing the chance to surprise us and and to go beyond our imagination because there's no such thing as civilian in one compartment, civilian uses and then military uses in another. China has a national strategy called military civil fusion. It's literally national policy that all civilian and commercial technology must serve the interests of China's military modernization.
▶ 0:42:49Thank you, Representative Alma.
▶ 0:42:54Thank you, Mr. Chairman.
▶ 0:43:00Thank you to our witnesses for being here. Uh today's hearing is titled Winning the AI Arms Race Against China. But let's be very clear, President Trump isn't winning. He's losing. And it's worse. He's empowering China. He's handicapping the United States's AI superiority by opening the door for China to purchase Nvidia's H200 trips.
▶ 0:43:24As we've discussed this morning, he's sabotaging our national security by auctioning off our most advanced technology to the highest bidder. And his aggression towards Venezuela and Greenland is creating a dangerous permission structure for Chinese and Russian aggression towards Taiwan and Ukraine. Misstep after misstep, Trump keeps stacking the deck for China, for China and against the United States.
▶ 0:43:50Now, while the president pushes problematic policies, we must work across the aisle in the spirit of bipartisanship that you've uh articulated this more morning witnesses to actually out innovate our enemies and win this race. This is not about ego. It's about technological superiority on and off the battlefield. It's about protecting US innovation. It's about growing American jobs.
▶ 0:44:15And if we want to win the AI arms race, we must be thoughtful about how we protect our advanced ships. Period. Starting um I'll start with Mr. Pottinger a and go down to each of our panelists. Do you agree with this statement? Yes or no? H200 chips are the building blocks of AI superiority and are integral to modern military applications. The country that controls these chips will control AI technology.
▶ 0:44:43the country that controls AI technology will control the future.
▶ 0:44:48I agree with the spirit of that comment.
▶ 0:44:51Mr. Cass.
▶ 0:44:53Yes. Like
▶ 0:44:55uh same answer for me.
▶ 0:44:56That's a quote uh directly from Trump's Department of Justice uh released mere hours before the president announced his approval of H200 chip sales to China. I ask for unanimous consent to enter this press release into the record.
▶ 0:45:14Why did the Department of Justice contradict the president? Because it's the truth and because the the Justice Department had rightly just shut down a smuggling ring that illegally exported H200 chips to China. Trump's own Justice Department believes that Chinese access to H200 chips will damage our national security. And I agree.
▶ 0:45:38That's why ranking member Meeks and I demanded Commerce Secretary Lutnik provide us with the rationale for the approval of the sale of these H200 chips and details on how the approval will be implemented. Yesterday, the Bureau of Industry and Security went one step further and made it easier to sell H200 chips to China by easing its license review policy. The H200 chip has six times more processing power than the current US export controls to China.
▶ 0:46:08It's truly like Trump is handing our opponent opponents our coordinates in the middle of a battle. Why are we giving up our advantage? So, Mr. Feiner, can you tell me how selling H200 chips to China undermines the United States's advantage over China and manufacturing advanced processing power? And does that threaten our national security given your recent proximity to the issue?
▶ 0:46:32Well, starting with your last part of your question, yes, I believe it does undermine uh national security and it does it in a in a few very clear and particular ways. One, as I think all of us have said in our opening statements, there is currently a gap in one key area of the elements that go into who will win the AI race and that is compute. There are two elements that go towards how China can try to fill that gap.
▶ 0:46:56They can try to get more advanced chips from the west, principally from the United States, and they can try to get more advanced tools from the countries that make those tools, the United States, the Dutch, and the Japanese tools in order to be able to indigenize and make these chips themselves. The strategy again that goes across uh the first Trump administration and the Biden administration has been deni to deny them access to those two key inputs that would allow them to close what is still a massive gap in compute.
▶ 0:47:22Right now, China can only make about 1 to 3% of the computing power that the western ecosystem, the democratic ecosystem, uh, can produce. I can't think of any good reason why we should allow them to fill that gap given the role that AI plays in any number of national security areas. Matt did a very good job, Mr. Potinger, of articulating them.
▶ 0:47:42uh but they go towards uh how AI will be a key factor in uh military technology in intelligence technology in biotechnology that can be used to develop novel pathogens and weapons uh in cyber attacks and there have been a number of recent disclosures in that space that can be enabled by AI especially AI backed by massive compute. So I think the answer to your question is overdetermined but that's my answer.
▶ 0:48:04Well I hope the sub headline of this hearing and the message of the Trump administration should be I can't think of any good reason. With that, I yield
▶ 0:48:12Chairman Emeritus McCall.
▶ 0:48:14Thank you, Mr. Chairman. Thanks. Thanks for bringing this issue to the forefront. I think it's one of the most important issues facing this committee, the great power competition with China, rivals when I was growing up, the cold war against Russia in the space race. Um, and for years we thought we could work with China uh as business partners. Uh, as you Mr. Pottinger, Mr. final recovering China.
▶ 0:48:40At that time, I was a young federal prosecutor in the Justice Department investigating the case of the reelection of of Bill Clinton and campaign dollars flowing from China into the campaign coffers of the DNC. Why? Because they wanted the competitive advantage of our technology.
▶ 0:49:03What I found were deposit slips in Johnny Chung's bank account from China Aerospace in a meeting with the director of mil military intelligence where they talked about this very issue. They wanted our technology back then in 1997 and they want it today. It's even worse, far worse today than it was in 1997. And I think y'all have laid the case out very clearly in terms of what the threat is today.
▶ 0:49:31you know, we they steal so much intellectual property from this country, but we don't have to sell it to them. And that's the axiom that led me to introduce the Enforce Act. Very simply, you cannot sell militaryra AI technology to China. Uh it was I marked it up out of this committee.
▶ 0:49:54It went to the floor uh and then it was blocked from a floor vote because of outside special interest groups at play in this debate. And let's be honest, there are outside special interest groups trying to block this what we were talking about today and that kind of legislation. I commend the chairman for his bill and I support it.
▶ 0:50:19My US attorney in Texas as these H200 chips were smuggled into China said, quote, "These chips form the building blocks of AI superiority and integral to modern military So this agreement with Nvidia, we met with the CEO and I asked him, you sold them the very chips that they
▶ 0:50:49used to create deepseek AI. AI opens the windows, the chairman said, to military grade applications. You sold them the technology that now has given them deep seek AI. Granted, it was legal until we caught up with it with export controls, but it demonstrates why those controls are so important. I want to ask Mr. Pottinger this question.
▶ 0:51:14You said the vice I always you love using the uh the enemy's words against them, right? But the vice chairman of China's industry association said that he believes that they need Nvidia chips to quote catch up or in other words Beijing needs Nvidia chips to take the lead in this great power competition.
▶ 0:51:43Is that an accurate statement and can you expand on that?
▶ 0:51:48Very good to see you sir. Thank you. I uh that's right. I I have a fuller quote in my uh submitted testimony, but uh we Shiao Jun is the vice chairman of the China Semiconductor Industry Association. So the in in China industry associations aren't like they are here in the United States.
▶ 0:52:06the uh the founding charter of the China uh semiconductor industry association says that their purpose is to uphold Marxism, Leninism, Maoong thought and sin ping thought on socialism with Chinese characteristics for a new era. So it's basically an appendage of the party state. What what he was saying just last week is that we're going to use Nvidia chips to leapfrog Nvidia uh over time. We're going to use Nvidia chips to leapfrog the United States in AI.
▶ 0:52:36That is the policy. It's very explicit.
▶ 0:52:39And essentially saying we're going to use Nvidia chips to defeat the United States in the great power competition. Those are my words, but I think it's it's very clear the intention behind his statement. Now, their argument is this. When you talk to them, you know, we just need to get them hooked on our chips. These are these are second generation chips. We need to hook them on our chips so they don't manufacture them themselves.
▶ 0:53:06And by the way, we need to compete with Huawei in their own market so we have market share against Huawei. Uh do you buy that statement, Mr.
▶ 0:53:16Sorry. That that
▶ 0:53:17do you buy that statement that that we need to hook them on our technology and sell them our technology and compete with them in their own market? China's leaders in their own words utterly uh reject the premise that that uh they will allow their country to become addicted. And by the way, Chinese companies have from what I'm reading have ordered 2 million of these chips.
▶ 0:53:40Chinese government may not actually let them import all of those chips because they want to mandate that uh Chinese companies continue to buy inferior Huawei chips at the same time until Huawei uh they hope can can catch up.
▶ 0:53:57They'll use more advance the more advanced AI that they're getting from the American chips, they'll use to compete with American companies and also to advance Huawei's uh uh planning uh and designs to catch up. So Nvidia may actually uh be uh sort of seeding its own demise.
▶ 0:54:17Anytime we compete with China on their own market, we we lose market share a yield back. That's right.
▶ 0:54:24Thank you, Chairman. Before we move on, I want to submit for the record uh a uh document by the Bureau of Industry Security, Department of Congress, released yesterday 113 2026. Uh it is the rule regarding sales of uh H20 and H200s. Uh and I want to thank the administration for putting this forward outlining no sales to Chinese military, no harm to American uh availability. And so I submit this for the record without objection. So ordered. And I now recognize Representative Sherman.
▶ 0:54:54Thank you. I'm going to spend about one minute on what everybody else is talking about because I think it's already been covered pretty well. I think the chair gave a great statement as to why we shouldn't be doing this. Um, and then we have uh the president gets us a 15% cut on everything Nvidia sells or a lot of what they sell. I'll ask our panel here.
▶ 0:55:18Uh if should we sell F-35s to China if we get a 15% rake off for the US Treasury? Anybody think that's a good idea? I'll just yes or no answer. Terrible idea.
▶ 0:55:31Have not heard of that.
▶ 0:55:33We should not.
▶ 0:55:34Easy question. Um and the the former chair points out all the money and power that is against us here. But there's an area where there's even more money in power and that is the basic issue of AI's domestic use, its development.
▶ 0:55:53Uh there was a letter signed by I believe Elon Musk and many other luminaries back in March of uh 2023 calling for a pause for six months in AI development at the advanced levels. Think of all the money and power. That thing died right away.
▶ 0:56:13Now in history there are many occasions where you focus on your traditional understandable enemy and then get We saw this with uh Bzant uh Bzantium and Rome fight Bzantium and Persia fighting just to have the Arabs take over. We saw the Inca civil war when they should have noticed that the Spaniards were coming. And we of course are very comfortable talking about how to take on China. We do that in this room all the time. they're our traditional enemy uh at least now.
▶ 0:56:43Um and we failed to focus that the bigger risk is AI itself. we have a uh situation where for the first time ever there's going to be a greater intelligence and human human intelligence on the planet. The last time there was a new level of intelligence is when our ancestors said hello to uh Neanderthal. It did not work out well for Neanderthal. And trillions of dollars are being spent to make I AI more powerful.
▶ 0:57:13I've been talking about this for 25 years. You think I that I sound weird now? Uh you should imagine what people thought when my staff told me to stop talking about this 25 years ago. Um so the uh the power there's no way we're going to pause AI research trillions of dollars and China are two reasons.
▶ 0:57:37The question is whether AI will be a tool, in which case it'll still be pretty dangerous, just as fire or nuclear technology is dangerous, or whether we're going to allow AI to become a creature, uh, an entity with its own objectives, its own ambitions, self-awareness. now the proponents of AI tell us they're doing research to make AI controllable.
▶ 0:58:03And then when you look at what they're spending money on, it tends to be a PR effort or they're focused on data security, which is important but not existential. Um, but they're not really focused on the issue that is raised by this book, which I commend to everyone, but the title tells them all if anyone builds it, everyone dies. Why super uh human AI would kill us all.
▶ 0:58:30I don't think anyone here can be confident that if AI were self-aware that it would decide that it liked us. Um, so got a good panel here. Trillions of dollars are being spent to make AI more powerful. Can any of you identify a program, an institute that is working right now to monitor for and prevent AI self-awareness and ambition? go with.
▶ 0:59:00my sense is that there's a number of certainly nonprofit organizations focused on this in addition to the research efforts that you mentioned uh going on in a lot of the labs.
▶ 0:59:11Can you name one that you think is doing a good job?
▶ 0:59:14I I didn't I didn't bring a list of organizations. I'm just saying
▶ 0:59:17I'll ask you to furnish one for the record then.
▶ 0:59:19And I'll only go to our third witness.
▶ 0:59:21I can't name one. I I do personally believe the most important decisions in this space are going to be made by the corporate actors themselves who lead these companies and by the US government that will have to decide where to draw policy lines.
▶ 0:59:33Well, the US government is already made apparently the decision to send the most advanced chip to China as long as we get a 15% rake off the top. And uh that's the entity that's got public interest at heart at least to some degree. uh nobody makes their stock price go up by saying we're going to spend 1% of revenue to prevent AI from being self-aware and ambitious.
▶ 1:00:01I would con commend to my colleagues I've introduced a bill and I could really use some co-sponsors uh um and it's called uh the AI research and threat assessment act that gets the uh national institutes of standards and technology NIST to uh begin programs on how to monitor for and prevent uh AI from becoming self-aware uh ambitious having its own goals because uh uh while the some
▶ 1:00:31of the people worried about this talk about stopping AI research. That isn't going to happen. This hearing illustrates that. The only way we avoid what this book is talking about is if what we get the benefits of AI but we make sure that it is not self-aware or does not have its own objectives. And I yield back.
▶ 1:00:52Gentleman yields back. Chair recognizes Mr. Wilson.
▶ 1:00:55Thank you very much, Chairman Brian Mast. And thank each of the witnesses here. And uh it's encouraging to see the bipartisanship that uh we have uh with great leadership like uh with ranking member Greg Meeks. Uh with that in mind, as federal agency, schools, and critical infrastructure sectors begin implementing artificial intelligence, there is concern about the Chinese Communist Party's operatives using American artificial intelligence models to further their world conquest agenda.
▶ 1:01:27Reports site anti-American propaganda generation with war criminal Putin mechanisms to monitor western media and cyber attacks on financial services, governments and critical infrastructure and Mr. or chairman Pottinger uh the foundation of defense of democracies is very important for supporting peace through strength. Thank you for your efforts.
▶ 1:01:48With that in mind, what security standards can and should be implemented on artificial intelligence labs to stop the Chinese Communist Party working on Putin or others from either exploiting American models to undermine America or accessing them through cyber
▶ 1:02:08Thank you, sir. I I I think that a we that we should probably have good insider risk uh programs uh operating in our labs. Uh so that we know that people who are working in those labs are are working in good faith in advance of enhancing human liberty and and well-being, not uh advancing the aims of uh a totalitarian regime.
▶ 1:02:37uh we should be working with uh allies and partners and excluding uh declared adversaries of the United States uh from uh gaining the fruits of that kind of uh research. Those would be two starting points and I'm sure I can think of some others uh that I'd be happy to submit.
▶ 1:02:56Very positive. Thank you. And Mr. cast after President Donald Trump's very successful conduct of operation midnight hammer against the Iranian nuclear facilities the chairman of the joint chiefs of staff general raisin Kaine disclosed that the war department had secretly been the largest user of supercomputer hours in America to develop the bunker bomb Jensen Wang of Nvidia has recently stated that 90% of the largest supercomputers in the world this year will run on advanced AI chips
▶ 1:03:26instead of CPU use. What security conditions should be imposed to ensure that the H200 sent to China are not used for AI superco computers for the people's liberation army?
▶ 1:03:38I think unfortunately it's impossible to impose such limits which is why we should use the limit of not selling them the chips. Uh as as was mentioned earlier, China has a military civil fusion policy that makes such distinction essentially impossible. I also think it's very important to say that the entire theory of it quote addicting them to our chips assumes that they're going to be able to use our chips for the things that they most want to use them for.
▶ 1:04:06Uh there is no world in which we somehow don't let them use the chips for the most valuable purposes and they don't develop their own chips. It's it's a pretty nonsensical approach to policy I would say. And indeed uh there's a civil military fusion that Americans just can't even comprehend uh with their plans for the future. And uh Mr. Finer uh I share your experience of having been in China 25 years ago.
▶ 1:04:34There was such hope for econom as our economies were so interconnected that it would be mutually beneficial that we continue to work together. As a son of a flying tiger, I was welcomed when I was there as they appreciated America's liberation of China uh with my dad's service in Kunang Chongdu and Sean.
▶ 1:04:52But sadly, the CCP is hurting the Chinese workers and rewriting history to credit war criminal Putin for liberating China, which is false, as the Soviet Union only assisted China after the war was virtually over in the last days. How can we reach the people of China that the CCP policies are self-defeating?
▶ 1:05:14So, first of all, thank you for the question, Congressman. I I I don't want to be too optimistic about our ability to penetrate what is a very difficult information environment in China. The CCP imposes severe constraints on uh what information is allowed to reach the Chinese people through a wellocumented uh great firewall as it's sometimes called. Um that said, you know, the United States should be messaging to the Chinese people exactly what our policy is, what our concerns are.
▶ 1:05:43Uh but it is a very difficult information environment to penetrate and if anything, uh hardening, not not softening over time.
▶ 1:05:50And indeed, the Chinese people should know we have great affection for the people of China, but want uh a difference in regard to their government. I yield back.
▶ 1:05:59Chair recognizes ranking member Meeks.
▶ 1:06:03Thank you, Mr. chairman for organizing this hearing. Our export controls are critical to our national security and our strategic competition with China.
▶ 1:06:13So, it's important to have a public debate on this topic. I also like to thank our three esteemed witnesses uh for appearing before this committee. In an environment where it seems that Democrats and Republicans can't agree on much, there seems to be an overwhelming consensus that America must lead the AI race.
▶ 1:06:36This requires investing in and supporting research and innovation here at home while promoting the spread of American AI technologies globally. It also requires ensuring that we are not contributing to the military and frontier AI capabilities of our chief competitor, the People's Republic of China. It would be an understatement to say that I'm concerned about the Trump administration's export control policy.
▶ 1:07:06I'm not simply concerned. I am alarmed because this administration is seeding our advantages in the AI race and actively undermining our national security. The administration has used our export controls not as a vital national security tool but as a bargaining chip in tariff negotiations with China. Desperate to resolve the trade war he started, Donald Trump has made multiple concessions to China to secure a trade deal.
▶ 1:07:34Trump rolled back his own export controls. First on selling the H20 chip to China, then on the 50% affiliates rule, and now he's dead set on rolling back restrictions that the Biden administration put in place to ensure that our most advanced chips aren't sold to China. Last month, the president announced that he would greenlight the sale of Nvidia's H200 chips to China, which the administration just formalized yesterday.
▶ 1:08:03This is a strategic mistake that will harm our advantage in the AI race and do grave damage to our national security. Just last month, when the Trump Justice Department charged two PCPRC individuals for smuggling H200s, it stated, "These chips are the building blocks of AI superiority and the intrical and and are intricral to modern military applications." And I unquote.
▶ 1:08:31Additionally, the administration's proposal to seize 25% of the profits of H200 sales to China raises all kinds of legal, ethical, and policy questions. The Export Control Reform Act of 2018 is clear. No fees may be charged in connection with the consideration of any application for a license approval. Our national security should not be negotiable and it should not be for sale.
▶ 1:08:58And that's why last month I introduced the restrict act to ban the sale of H200s to China and to codify the Biden administration's restrictions on the most advanced US chips sales to China. Also last month, I sent a letter to the Department of Commerce requesting license information on advanced chip sales to China as well as copies of any governmenttogoment agreements related to advanced chips exports.
▶ 1:09:26Des despite my January 12th deadline, the Commerce Department has yet to provide the information I requested. Mr. Chairman, I would like to ask for unanimous consent to submit that letter into the record. So ordered. Again, uh I want to thank this panel uh of witnesses for appearing here today. But comprehensive oversight means we must also have administration officials testify publicly on this topic so that our members at this committee can conduct proper oversight.
▶ 1:09:57The states of the AI race and for our national security are too consequential. Mr. Chairman, I want to thank you for the opportunity to give my opening statement at this particular point knowing that I couldn't get here and thank you for that opportunity to do just that. Should I proceed with my questions? Thank you. So the president has said that he will not approve H200 licenses for bad actors in China.
▶ 1:10:24While this does not ally concerns about smuggling and diversions, I am also skeptical that the administration will pick the right customers from the start. So Mr. Pottinger, which foreign company is our biggest competition when it comes to developing the most advanced AI models? the the main Chinese companies, there's several of them.
▶ 1:10:48Uh it includes Deepseek, it includes Jerpool AI, Alibaba, uh Bite Dance, which uh of course uh runs the uh Tik Tok uh algorithms that uh have distorted public um u discourse in this country and there are many others, sir.
▶ 1:11:08Yes. And deepseek is really one of the big ones. Uh would you agree that deepseek for example thus far has been constrained by our chip export controls?
▶ 1:11:19The the companies from what what I'm uh reading that these Chinese companies are have already ordered up something like 2 million of these chips since uh since the decision was made to start.
▶ 1:11:31But my question was do you agree that that was sent out that they were constrained beforehand?
▶ 1:11:38Absolutely. uh with and and they fear that the gap would continue growing but for the H200s
▶ 1:11:45and Mr. Fina could uh Deep Seek's open-source models have been even more advanced if it had access to our more advanced chips.
▶ 1:11:56Thank you uh Ranking Member Meeks. I think the answer to that is undeniably yes. Uh Deepseek's model was built uh essentially on US chips it acquired before export controls went into place. probably uh some chips that were smuggled subsequent to export controls uh going into place and giving them access to more advanced chips will only allow them to build a better model. And and by the way, you don't have to take my word for it. The Deep Seek CEO uh himself uh was recently quoted as saying, "Our problem has never been funding. It's the embargo on high-end
▶ 1:12:26And so, you also think selling H200s to Deep Seek could hurt our lead in the AI
▶ 1:12:34Yeah. Uh I you know I I I agree. It appears the administration does not though. In fact when a member of this committee asked BIS under secretary to commit to denying H200 licenses for deepseek he refused. So if this administration can't promise that they won't sell H200s to deepsek how can we have any faith that it will make sound judgments about which endusers in China should be approved for H200s?
▶ 1:13:02Let me go to something else that I'm deeply concerned about and that's the idea that export controls could be used as a check in trade deals. I'm interested if any of our witness can see a scenario where we should use export controls which is at its core a national security function as a bargaining chip on trade deals as the administration has admitted it is doing. Let me start I guess with you Mr.
▶ 1:13:33Feer. What's your view on whether we should bargain away export controls for trade deals and what does it mean for our credibility with allies and partners and how it could impact our broader export controls framework? I believe a good principle a ranking member is not to barter, exchange or negotiate uh issues of national security in the context of of trade negotiations or uh ch other economic challenges whether that's uh national security related export controls or uh doctrinal policy toward Taiwan
▶ 1:14:03or any number of other national security issues we have uh with the PRC.
▶ 1:14:07Mr. Pottinger,
▶ 1:14:09I second that.
▶ 1:14:11Mr. gas
▶ 1:14:13certainly in the context of the negotiations they've been holding there there's nothing to negotiate China China's not able to offer anything of of value because it's not interested in actually having a constructive relationship with the United States
▶ 1:14:30so let me ask this be my last question uh by rolling back our controls against has the administration created for our partners to do the same thing and what impact do you think it has on working with allies and partners on export controls against China in the future Mr. China.
▶ 1:14:54So I mentioned in my opening statement as did some of the others. We haven't focused on it as much in the questions, but the other key control that is placed on technology going to China is semiconductor manufacturing equipment. And there is uh almost a an explicit certainly an implicit understanding among the United States and then the other countries that make this theme that if we are going to ask of them not to give their companies access to the Chinese market to sellme
▶ 1:15:25uh we should be asking the same thing of our chipmakers not to have access to the Chinese market for the most advanced semiconductors. If we roll back or erode the restrictions on our own companies, certainly the incentive is there for them to roll back or erode the restrictions they're placing on their own companies. And that's one of the big concerns I have about the recent uh announcement related to the H200.
▶ 1:15:47Thank you. I yield back.
▶ 1:15:48Thank you, Ranking Member Meeks. And I don't know if the ranking member had a chance to read the final rule issued yesterday or not, but it does uh state very clearly no chips will be approved if there is a military enduser. And there are very specific controls in it uh to ensure no remote access by a number of end users as well which is something new whether that's for Bellarus, China, Cuba, Iran, Macau, North Korea, Russia, Venezuela uh as well as parent companies headquarters in those places and the rule as was as I submitted it for the record also
▶ 1:16:19states uh no chips can be approved at the expense of Americans. Uh so it's important to note those things are in that final rule as well. Uh and I now recognize Representative Perry. Thanks, Mr. Chairman. I think it's also important uh that the whole story be told here and that uh recent reporting says that Chinese customs authorities have blocked all H200s from actually getting through customs in China.
▶ 1:16:43And that's another indicator that they're really not interested in a substandard chip and there's a lot of politics involved in this. But look, we're all I think interested in safeguarding America. Um Mr. Cash US controls don't preclude equipment going to China but they just preclude American equipment going to China.
▶ 1:17:02Uh some of the test the advanced uh test equipment for that there are only two two suppliers right one is an American company that is not allowed to supply Huawei another is a Japanese company that does test equipment is essential to improving the design and efficiency.
▶ 1:17:19Shouldn't we or should we focus on what we can do to stop the single foreign company from uh our controls and helping Huawei develop these advanced chips?
▶ 1:17:34Yeah, thank you for that question. I think it raises a very important point and and one that Mr. Finer was just speaking to as well which is that uh for this policy to be effective toward China there are alliances that need to be maintained and we do need to hold hands with our partners in standing against China.
▶ 1:17:53Um this sort of situation where the US expo imposes an export control but an ally doesn't harms our own company without doing much uh to accomplish what we want in China. So I think we need to further strengthen uh the terms on which we really insist that our allies work with us on this. We do have laws in this country that that allow us to further that and we should use them. The problem as Mr.
▶ 1:18:21Per just said is it's it is awfully hard to do that if we are at the same time opening up China for our own companies. And so we should absolutely uh focus on those sorts of issues you've raised, but we are not going to be able to do that unless we get these fundamental export controls with respect to our own producers right.
▶ 1:18:41Certainly I understand that and I'm sure that Japan understands it's a big world with a lot of different moving parts and we're talking about one company and I'm sure there's a way to bridge that gap and maintain the alliance while um while hemming China in Mr.
▶ 1:18:56Pottinger brings me to a crit critical vulnerability which is dual use companies on DoD's 126H list of the Chinese military companies still able to access US capital markets today even as of the June 30th 2026 procurement ban as that looms this afternoon I will be introducing the devesting from China's communist China's military act which would mandate automatic treasury inclusion of any newly added
▶ 1:19:271260H entities onto the NSCMIC list within 90 days. This would restrict US persons from purchasing their securities, harmonizing regimes, and cutting off capital that funds dual use AI breakthrough breakthroughs like reasoning models for autonomous swarms or generative tools for intelligence Technically speaking, many 1260H firms contribute to the PLA's military civil fusion pipelines
▶ 1:19:57that accelerate adoption of civilian LLM into the defense system. Does closing the investment loophole strengthen our position and send send a very strong
▶ 1:20:09Thanks so much, Congressman, and I look forward to to learning more about uh your bill. you know, in during the first Trump administration, uh, President Trump did move forward uh, on a limited list of Chinese companies to try to prohibit uh, Americans from investing in them and even to force divevestature over a period of a year. I I believe that this is a wise policy and it sounds like it's very much in tune with with what you're uh, advancing.
▶ 1:20:39uh we have the deepest largest and most liquid uh pools of capital in the world available on our markets here. Um and Beijing has used that to their advantage uh to
▶ 1:20:52and we've allowed them to do it over regardless of administration and politics. We've allowed it to do it at our own peril and actually give them given them special treatment visav our own American investors.
▶ 1:21:04That's right. it. There was uh uh fortunately the Holding Foreign Companies Accountable Act that was passed a few years ago that was designed to close at least one of those loopholes and I'm not even sure that that has been uh closed yet. So, thanks for your leadership on that.
▶ 1:21:19Appreciate it, Mr. Chairman. I yield the
▶ 1:21:24Representative Lou is recognized.
▶ 1:21:26Thank you, Chairman Mass. Before I talk about AI, I want to talk about Venezuela. This morning, Democrats held a special hearing on Venezuela. And we did so because Republicans refused to hold a public hearing on Venezuela. I'm just going to state a very obvious fact. If Republicans thought what Donald Trump did was good, why are they afraid to talk about it? Why are they afraid to hold public hearings of Venezuela? Because they know that Donald Trump's Venezuela operation is a disaster.
▶ 1:21:55Donald Trump said he is acting president Venezuela. And what did we learn from the State Department recently? They just issued a dire warning telling Americans to leave Venezuela right now because there are armed militias running around targeting Americans. And the Exxon CEO recently said to the White House to Donald Trump's face, Venezuela is I demand that this bipartisan foreign affairs committee hold a hearing on Venezuela to get the truth out to American people.
▶ 1:22:25Now, let's talk about AI. So, as far as I can discern, this is the White House policy on AI. Suppress federal bills on AI, try to suppress any state from regulating AI, and then sell advanced AI chips to China. And now I'm speaking to the tech industry. Following the White House lead, they have led you down a dark and wrong path because it's resulted in three things you want to avoid. backlash from the American public.
▶ 1:22:57You've got now backlash from Democrats and Republicans and you've got multiple states regulating you. So maybe you just ask your large language model for a better approach because it's not following the White House policy. It's led you down the wrong path. Now, specific to export controls on AI chips, I think there's really only one question here.
▶ 1:23:23uh which is well how long is this going to delay China from getting the chips so or getting the same sort of capability. I served on the US Air Force on active duty. One of the reasons we have an amazing air force is not because we have a fighter jet no one else has. It's because we have a fighter jet no one else has for 10 to 20 years. So in terms of AI chips, if you were to tell me that stopping or banning high performance ships in China would hold China back for two weeks, I'd say sell these chips to them.
▶ 1:23:51it was two months, I'd probably still say sell these chips to them. If it was two years, I would say no, we probably said sell these chips to them. Uh so my question is what Nvidia has said is that the highest performance Chinese chip which I understand is the Sen 910C is comparable to the H200. So I just want to ask that question of all of you. Uh do you agree with that? And and if you don't, what is the timeline we're talking about here? two months, two weeks, two years.
▶ 1:24:23Anyone can answer that.
▶ 1:24:26I'll speak to it briefly. I think it's a very important question to focus on the actual technical details. Uh and it is first of all just not the case that uh any chip coming out of Huawei at this point is the equivalent uh of of what the H200 can do. I think it's also important to to make two other distinctions. One is just how many chips Huawei can produce.
▶ 1:24:49Uh somebody mentioned earlier and exactly correctly even if Huawei can produce a couple hundred thousand chips in a year uh that are equivalent to some American chips, the US can produce millions and as Mr.
▶ 1:25:03Ponder mentioned that's why China is now trying to buy the Chinese companies are trying to buy millions of these chips because uh it is not just the capability of the individual chip it is the scale and then the final point I I would emphasize that as this scaling up is happening so quickly uh the cost and the energy efficiency of the chips is extraordinarily important.
▶ 1:25:24So it is true that China is finding workarounds stringing many more less powerful chips together and so forth to try to advance its efforts um but having that higher cost, having that higher complexity is a burden for them and it gives us an advantage.
▶ 1:25:42And so every generation as we continue to move forward that we are able to expand our lead in total capacity that we are able to build data centers that are better than the data centers they build leads to an entrenched and sustainable advantage.
▶ 1:25:57So let me just ask that this question again. What how far would we be setting China back if we didn't sell them H200 chip? Two weeks, two months, two years?
▶ 1:26:06Longer. I I liked your analogy. It's it, you know, the H200 is is an F-35. Just because we're now going to be building an F-47 is not grounds for us to start selling all of our F-35s to China. Your analogy is exactly right. We're these are massive investments that American companies have made into current generation technology.
▶ 1:26:31Just because there's going to be another generation later is not a reason for us to to bring China up to where we are. Chinese AI scientists as early as just a few days ago were all bemoning the fact that um without advanced American chips, the gap is actually growing. They are falling further behind uh the United States.
▶ 1:26:53Thank you. I yield back.
▶ 1:26:55Gentleman yields back. Chair recognizes Representative Heisenga.
▶ 1:26:59Uh thank you, Mr. Chairman. I just want to say thank you for your your work on this this hearing. uh you and I have been spending a fair amount of time and uh conversations both uh in and out of skiffs uh surrounding all of this. And I I also want to just say uh to the fine folks at BIS uh I appreciate this rule and the step towards that.
▶ 1:27:22Uh but we all know uh one the devil's in the details and two rules and regulations are only as good as your willingness to enforce them. And that is what we're going to be watching uh for on this. So uh I'm going to start uh obviously we've got some crown jewels here in artificial intelligence with Colossus one and two data centers uh thanks to Elon Musk uh which together host more than a million H100 equivalent AI chips.
▶ 1:27:53Uh data center data centers like this underpin I believe America's advantage in AI versus the Chinese Communist Party and and their capabilities. Um, so Mr. Cass, let's say China had its own equivalent of Colossus 1 and two. What kind of military and uh what kind of military intelligence and economic capabilities could that unlock?
▶ 1:28:14I think it's important to to distinguish between two steps. There's both a question of to what extent can they train better and more powerful models and then what capacity do they have to actually be running the models. And so certainly to the extent that they have more of the most advanced chips can build a cluster more like Colossus they're in a better position to train a more powerful model. The second problem
▶ 1:28:37sorry and the the 2 million number was thrown out by Mr. Pottinger earlier and whether that's a actually 100% accurate or not, we know that any significant number of those types of chips could bring this type of capability. Correct. And basically create the e ecosystem.
▶ 1:28:57That would be a step change for China to have access to that many advanced chips.
▶ 1:29:02Yes. And and just to then emphasize one additional point and and this goes to the congressman's question about how far behind China is at the end of the day the rate that you can deploy AI whether for defense or in your economy comes down to the total amount of computational power that you have. And so I think a best way to think about whether we are ahead or not is what share of that most advanced computational power do we have? We were roughly at par with China before we imposed all these export controls. we now have a 5x advantage.
▶ 1:29:33To Mr. Ponder's point, we should be trying to drive that higher, not saying it's okay to
▶ 1:29:37Well, I mean, not everybody agrees, right? I mean, there are some people that are arguing the most effective way to kneecap Huawei's growth in semiconductor manufacturing and by extension China is to take market share. I think that was getting talked about a little while ago. Um and uh they they believe that mass sale of a AI chips uh will then basically allow us to frontr run.
▶ 1:30:00Um it's been a while since I've read SunSu's Art of War, but I I I I kind of remember a few concepts of this about how you're going to suck your your enemy in before you then do an end round on them. Um and it seems to me that two things can be true.
▶ 1:30:18um they may need uh advanced chips uh and uh they also may still strive to develop their own indigenous chip systems. So it seems to me that some people are arguing well yeah but if we just sell these to them then it's just going to drop off and it's not going to happen. Um now there's been some and I I think it was Mr. Cassie had suggested maybe Xi Jinping may not allow this or whoever the decision makers are.
▶ 1:30:47We know it's pretty much him. Um but so what happens if if if uh Xi decides not to block Chinese AI labs from purchasing H200? What if he does decide sorry uh does that mean America uh should be selling these H200s or even more advanced chips to China to to sort of entice them in?
▶ 1:31:07Yeah, absolutely not. And you're right. Cigin Ping has made clear and and it's cascading through his system that the message is uh Chinese companies can buy a certain number. It's not clear how many they're going to permit them to buy uh of these H200s, but they'll be required to continue buying inferior Huawei chips so that Huawei can catch up and eventually over uh you know basically push uh Nvidia completely out of the market.
▶ 1:31:33So, it's a total fairy tale to think that this is this is a a way to uh addict China to our technology. We've seen it over and over and over again this
▶ 1:31:44Okay. In my closing moments here, um I I think uh Mr. Perry had talked about and asked about testing equipment. Uh I would note that I have a a bill uh the semiconductor technology resilience integrity and uh defense enhancement act stride act uh which would which would require uh our allies to adhere to our own export controls and uh and uh and I guess the question is should the United
▶ 1:32:14States use foreign direct product rule to end foreign backfilling? What we're seeing is uh some of our allies are allowing that back filling to go in and and do repairs and enhancements and those kinds of things. We should if necessary. We we our goal should be to reach a good agreement that everybody holds hands on and and wants to work together on, but we certainly have that stick available and and it should be part of our strategy if we need it.
▶ 1:32:44And I know Mr. Chairman, my time my time he just gave me the wink like you're done. So, uh, but I I do appreciate the extension there and, uh, this is extremely important and I appreciate everybody's time and attention. Thank
▶ 1:32:56Representative Klodov.
▶ 1:32:58Thank you, Mr. Chair, and to our witnesses for being here today. I will say it is a new low for this majority to refuse to even discuss, let alone conduct oversight of the president's invasion of Venezuela and potentially US partners around the world. This committee has never made itself as irrelevant to our country's foreign policy as it is right now.
▶ 1:33:21And I don't know how this majority expects to credibly call out the dangers of China's AI capabilities if Trump is committing the same coercion, exploitation, and imperialism they warn could come from China. I call that cognitive dissonance. But if we're going to talk about AI and the AI competition with the PRC, then we also need to sound the alarm about how Trump is causing us to lose the AI race.
▶ 1:33:48So uh in uh at his meeting with Xi Jinping in October, Trump bailed himself out of his own trade war by negotiating away new export restrictions. So since then, he has reportedly prohibited new export controls on China to avoid rocking the boat, leaving us with less tools and leverage than before he started his trade war. So Mr.
▶ 1:34:14Feiner, would you say that removing our ability to impose new restrictions on the AI technology sold to China is detrimental to protecting US leadership in AI?
▶ 1:34:28Uh, Representative, I would agree with that statement. Yes,
▶ 1:34:30thank you very much. Um, so I'm I'm hearing a lot of excuses that it could be worse. Uh, but that's not what I want to hear. I don't think that's what the American people want to hear when we're talking about national security. So, Mr.
▶ 1:34:45Pottinger, does giving China up to half the amount of H200s that American customers have access to significantly boost China's global competitiveness in It's it's damaging to the US national security interest and and to our commercial interest. I mean the interest of US companies.
▶ 1:35:09You know every time one of these chips is made um even an H200 which which is uh slightly you know less capable than u
▶ 1:35:22the F-35 instead of the F7
▶ 1:35:23right the F35 and the F47. It means that there are there's fewer uh there's less capacity available to make actually the the more advanced chips that American companies want. And that's because many of the components that go into the chips are the same.
▶ 1:35:40So for example, there are high bandwidth memory uh chips that are made by a company in Korea that go into the H200s that we'd be selling to China as well as into uh H300s and other chips that American companies are buying. That means it's zero sum. The more chips that Nvidia makes for China, the fewer that will be available for American companies.
▶ 1:36:02That's right. That's right. So, basically, these chips are a big deal. Um, and I want to say that the most powerful AI chip on the market right now are the Grace Blackwells, but Trump lifted restrictions on the sale of a very advanced the F-35, you know, uh, And we do know that Trump is visiting China in April. We don't know if he will eventually uh put the sale of black wells to China back on the table. We don't really know that. So, Mr.
▶ 1:36:31Pottinger, you've previously said that selling black wells to China would be catastrophic for US technology leadership. Do you stand by that
▶ 1:36:43Okay. Thank you. Um, we also know that Trump's BIS has created a massive backlog of license applications to even lowrisk countries and that is holding up billions of dollars in potential R&D funding for our chip industry because we know that AI innovation is supported by the revenue that US semiconductor firms invest back into R&D. So, Mr.
▶ 1:37:09Feiner, would you say that this recipe that I just mentioned uh undercuts our global
▶ 1:37:17Uh not only do I agree with that, I I think the addition of now what is looks to be a very complex review that will have to be undertaken with regard to the rule that was promulgated last night and I, you know, just started to dig into it like everybody else. uh the fact that that is going to be a time-intensive, laborintensive review involving multiple factors. Hard verification, by the way, verification that's going to depend in some cases on the attestations of Chinese companies about who their customers ultimately are.
▶ 1:37:45Uh that does not suggest to me that this backlog is going to get shorter. And the idea that we're going to be doing this labor intensive review to have chips end up going to China as opposed to partners, allies, and other places to me does not strike me as the best possible use of of BIS resources. You're being very kind. Uh, thank you for your responses, Mr. Chair. I yield back.
▶ 1:38:07Representative yields back. I would say know your customer, know your client requirements are very significant. I applaud the administration for putting those in there. And I recognize Representative Burchett.
▶ 1:38:19Mr. Cass and Mr. Proinger, what what are some of the economic implications of China getting an edge over the US and AI manufacturing? And I I worry about this body specifically getting involved in regulating AI because I mean, you know, I joke around and some of these guys are still driving a 72 Pinto with an eighttrack tape player and they're going to I mean, I couldn't even spell AI when I got up here. So, I'm I'm just trying to figure out where we're at on this thing.
▶ 1:38:50Sir, either one. Uh I'm glad you've raised the the economic dimension of it because I think obviously we've first focused first and foremost on these national security issues. The economic dimension of this is is enormously important. I think especially in the context of the re-industrialization that we are trying to pursue in this country.
▶ 1:39:10uh we are so far behind China on so many dimensions of the technology that we need just just to make things and and to be an effective producer of them again because we we gave all of that away making these mistakes the last time around.
▶ 1:39:24Let me stop you there. Do do you think I always worry about this these lobbyists knowingly or unknowingly whatever. I mean they're mercenaries. They get paid by somebody who's paid by somebody and it's linked back to the Chinese. Do you feel like they could be suppressing us um through economic incentives and then gutless politicians pass that along?
▶ 1:39:45I I I think it's something worth investigating. I don't I don't know what's happening, but I think that AI is one of the areas that it's it's not just about technology as a tech sector. It is an enabling technology that is is the advantage we potentially have in becoming better at materials, becoming better at automation, becoming better at manufacturing processes, becoming better at supply chains. If we are going to rebuild our industrial base and compete with China, we have to leverage that advantage.
▶ 1:40:14If we let China build up comparable scale in AI even in purely economic terms, uh we will have given away the the the edge that we had and that we really do need.
▶ 1:40:28I I would add just that helping China improve and and expand its influence and and dominance in in the marketplace in AI is a form of regulation. In other words, we're we're regulating ourselves by giving a totalitarian dictatorship uh a major say in in the standards and uh and um uh form that AI takes.
▶ 1:40:56China regulates more than than uh you know this August body is ever regulated in its 250 year history. So if if we're allowing Chinese companies to move ahead, we are accepting the intrusion of government regulation, except that regulation is being made in Beijing.
▶ 1:41:16Well, that goes to my next question. How close are they? I hear they're a nanoc behind this. What does that mean? I'm from East Tennessee. Help me out a little bit here.
▶ 1:41:25I I I I do not um dismiss the the very remarkable uh you know, innovations that are also coming out of China. They've got good engineers. they've got access to more data than we do because they there's no privacy uh from their government. Um but the the crucial problem for them, the crucial bottleneck is they don't have the computing power we have.
▶ 1:41:50And according to Chinese scientists themselves as early as a few days ago, they were saying this is the gap is widening. We cannot catch up to the Americans uh unless we have that kind of computing power.
▶ 1:42:03If these export controls remain the same as they are now, who do y'all think will will lead the ARA say in 5 years?
▶ 1:42:11Yeah. If we if we don't um give China a launchpad to try to leapfrog us, uh we're going to win. We'll win this.
▶ 1:42:20Should there be a total ban in place?
▶ 1:42:23a a bans sir on um on selling H200
▶ 1:42:28on the chips.
▶ 1:42:30Agreed. Okay. Okay. If China were to move on Taiwan um what do you think that would mean for the US technology and
▶ 1:42:40This would be a uh a disaster for the United States because uh Taiwan is a friendly democracy. They they've they've built up uh an incredible capacity. in fact the the only major capacity in the world to to make the these advanced chips, all kinds of advanced chips, including the ones we're talking about. So if China coercively annexes Taiwan, we're basically giving China a kill switch over our whole tech economy. Mr.
▶ 1:43:10Cass, you want to add anything to that,
▶ 1:43:13All right. Um All right. Well, I'll yield back my remaining one second, Mr. Chairman. Thank you.
▶ 1:43:21Representative yields back. Representative Costa is recognized.
▶ 1:43:24I thank you for that additional one second. Uh I too hope that at some point given everything that's occurred here in the last 10 days that this committee will uh reflect on its jurisdiction on these challenges we face in Venezuela. Having said that, I think that u this effort with regards to AI and China is is obviously critical.
▶ 1:43:48And let me begin by asking the three witnesses here because I think whether regardless of which uh political party you're a part of or which administration, I look at China through this prism and I would like to know if you agree with me or not. China is an adversary. Number one, number two, China is a competitor. And number three, China is a vast market. And it's I think with that backdrop that we ought to look at this challenge with regards to AI.
▶ 1:44:19Do do the three of you agree with that?
▶ 1:44:22Um I I I agree with you Congressman in that order. China is an adversary.
▶ 1:44:28Uh uh first it's it's it's been a competitor for a long time to the to the extent that it's a vast market. It's not one that is uh open and welcoming.
▶ 1:44:36Right. and their reputation for following the World Trade Organization or the rules of uh you know world global markets is is lacking. Um let's be clear about that as well. Um the um conditions of the export authorization uh Chinese customers cannot use chips for military purposes. However, when the CCP's national level military civil fusion strategy uh uh it seems to me this rings hollow. Would you agree with that?
▶ 1:45:09Well, I what I would say is that it would be very very difficult if not impossible to enforce.
▶ 1:45:14Well, right that I mean we've seen that time and time again over the last 20 years under the MCF resources state control including economic, science, technology, military and more to advance the party's goals. That's it's all one entity, you know, it's it's it's a syndicate. Once technology enters the Chinese ecosystem, there's no way we in the United States or any US-based firms can guarantee it that that it won't be used for military purposes. Is that correct? You all agree with that?
▶ 1:45:45Um and so I mean when we have this conversation it it it it is important to know in the United States we innovate Chinese folks replicate and and they say the Europeans regulate but the fact of the matter is we need to maintain our innovative edge right any action on a commercial trade that would close that gap in in favor of the Chinese would be
▶ 1:46:15be a a nonsensical starter from from my perspective. Would you agree? Why would we want to give our adversary the opportunity to to equal the playing field in any circumstance? Especially when you understand what the kind Chinese Communist Party is all about. Um I think you know we owe a lot of uh efforts to the revolutionary technologies that have occurred in Silicon Valley and elsewhere in this country. It has made an incredible economic growth for the United States.
▶ 1:46:45But why would we seed those innovations and the investments and by the way those investments in part were made by federal taxpayer dollars um for the US government that was in our own interest and that includes the risk five which is an open standard instruction set architecture for computer processors essentially a blueprint for designing computer chips which received early stage support and funding under DARPA under the defense advanced [clears throat] research projects today Chinese companies Chinese companies and you go there and you
▶ 1:47:16can see it are touting their use of risk five chips that they use for self-driving cars and AI models and their data centers. Is that not correct? So it it seems to me that uh we want to maintain our technological advantages in all circumstances and and given the fact that uh China is an adversary as well as a competitor uh we we should not lose sight of
▶ 1:47:46that fact when we're chasing markets that might be illusionary in the long in the long term. Right? I mean, we see this time and time again over the last 5, 10, 15 years with China, and that, by the way, they've been fairly successful at it, So, what would you advise us to do on the current proposal by this administration regarding uh the sale of these chips? Well, thank you, Congressman.
▶ 1:48:15One one would be to legislate uh to backs stop um uh rules that the administration puts forward. Um I you know if if if the rules that the administration put forward are enforced, I think it would have uh a um a pretty good shot at restricting if not cutting off the flow of advanced American ships. But I think Congress is going to have to act uh uh to ensure that that those rules would even be followed. and we should be
▶ 1:48:49I like consistency.
▶ 1:48:52I yield back the balance of my time, but I think this is a conversation that we're going to continue to have to have if we want to maintain our competitive edge. That's the bottom line.
▶ 1:49:02Thank you, Representative Costa. And we will look forward to doing uh in addition to the classified briefings that this committee has led on Venezuela uh open source hearings when there information is less sensitive surrounding the political prisoners being released, the conversations going on with the uh acting president who's working with us. Uh and I'll certainly bring up then likely that the uh time that it took to snatch Madura was less than most of us take to speak in this committee.
▶ 1:49:32Well, thank you very much. I'll look forward to that, Mr. Chairman.
▶ 1:49:35I am sure many will. So, Representative Bar, you're recognized.
▶ 1:49:39Well, uh, to be sure, the United States, uh, is in an AI race with our key adversary, uh, the People's Republic of China, and the stakes could not be higher. Whoever wins the artificial intelligence race will gain an edge in economic power, military dominance, technological leadership, and global influence. This is the defining competition of the century.
▶ 1:50:02At the end of last year, the president signed into law the Defense Appropriation, the the National Defense Authorization Act, which included in my bill the Comprehensive Outbound Investment National Security or Coins Act, also known as the Fight China Act. The Coins Act ensures that Americans are not unknowingly funding the Chinese military-industrial complex by restricting the flow of capital and investment into Chinese military companies or critical technologies including artificial intelligence.
▶ 1:50:32Mr. Pottinger, uh you've been long an advocate for this outbound investment regime. How should the Treasury Department think about defining AI in their outbound rulemaking? I literally just came from another hearing across this building uh with uh assistant secretary of treasury for investment security um and uh the the new uh the new assistant secretary Chris Pilkerton uh and I asked him about Treasury's plan for implementation of of of this uh can
▶ 1:51:02you can you give advice uh to Treasury on this? I I I'd be thanks for your your leadership on these issues, Congressman, and yeah, I I I would be uh uh I I I' I'd want to prepare something uh thoughtful in in talking to them, but but Treasury is a major uh uh national security uh component of of the US government in including uh on where where capital flows in
▶ 1:51:32ways that could uh harm us in our uh in in our and our lead on AI or or conversely expand our
▶ 1:51:41Well, export controls is obviously an important tool in the economic statecraftraft toolbox, but uh so is Treasury implementation of this legislation. the the the question really is will limiting investments, western investments into AI that advances Chinese military and surveillance capabilities uh uh onshore those investments into US firms that can in turn supercharge US competitiveness in this race.
▶ 1:52:06I think so.
▶ 1:52:07Okay. Um let let me move to another component of the AI race and that's power. That is the massive increase in power demand that will be uh that will accompany these uh AI data centers. Firm base load power is paramount to the future of AI as our own department of energy estimates that data center power demand is likely to double or even triple by 2028. Kentucky, my home state, is a massive coal producing state.
▶ 1:52:36We literally after 115 years of mining coal still sit on an ocean an ocean of coal. However, under the under the two previous Democrat presidents and because of their burden burdensome war on coal regulatory policies, the US has retired over 290 coal plants since 2009. That's over 120 gawatts of power of base load firm dispatchable power in this country.
▶ 1:53:04Meanwhile, China builds and approves roughly two new co coal power plants a week. Because of this, we are on a the precipice of losing the AI race to China. Mr. Pottinger, my staff recently shared with you a copy of my plan to revive Kentucky coal jobs and power the technologies of the future. What should be done to increase base load energy production, including Kentucky coal, and help our president win this AI race against China? Thanks, Congressman. And thanks thanks to your staff for for sharing that.
▶ 1:53:33I I'm in firm agreement that we need an all energy approach uh to our power mix and to AI. Uh and and and of course that also means uh next generation sources as well. We don't we've got to win in the advanced fision nuclear and certainly uh fusion uh power race as well. Uh but it has to be traditional sources as well.
▶ 1:54:00Yeah. Yeah, I mean nothing uh can replace dispatchable base load firm power. Intermittent power sources is not going to cut it in the AI race. Uh if we want to win the AI race, we have to be realistic about what China is doing with fossil energy and what we're doing with fossil energy. And we cannot meet the power demands right now. We're looking at hund time increase in blackouts because of these speculative investments in green energy. and we've abandoned the firm base load power that we need for AI dominance.
▶ 1:54:30Uh Mr. Poter, last question. China is nanoseconds behind us according to Jensen Wang. What other policies should Congress be specifically targeting to help the president win this AI race? I I think the president's AI action plan lays out a lot of very good stuff, right? Including deregulation, making land available. It it includes um uh ensuring that China does not have access to the same computing power.
▶ 1:54:57Uh we uh just a few minutes ago we were talking about how important it is. The only thing worse than giving China really powerful advanced American chips would be giving China the ability to make its own advanced powerful AI chips. And so um American companies have already been uh restricted from selling uh semiconductor making equipment to China.
▶ 1:55:18We need to make sure that the Netherlands and Japan and other countries are not uh should should have to abide by the same rules that American companies are because it's actually going to make the democratic world safer uh and more prosperous.
▶ 1:55:31Thank you for your leadership on this. I yield back. Representative yields back. Representative McBride is recognized.
▶ 1:55:37Thank you very much, Mr. Chairman and Ranking Member Meeks for uh convening this important conversation. I'm actually going back and forth between this committee and science, space, and technology where there's a concurrent hearing happening on AI policy as well. And I'm glad that this Congress is so focused across committees on this important area of innovation and of policy.
▶ 1:56:00Um, I think what is abundantly clear is that the continued expansion of AI, the continued development of AI technologies is going to represent one of the most significant transformations for our species since at least the industrial revolution and perhaps even arguably since human beings thousands of years ago stopped being nomatic creatures and became stationary agricultural based societies.
▶ 1:56:27Um and that presents huge challenges, huge opportunities, huge questions for this Congress, for policy makers, for developers to grapple with. But regardless for folks who are watching, regardless of whether they are predominantly excited about the opportunities with AI or predominantly concerned with the challenges that that come with it, I think all of us here and I think most people at at home can recognize that no matter how you feel about AI, we want the
▶ 1:56:57United States to lead. We we want the United States to lead in this space economically. We want the United States to lead in this space due to national security. And we certainly want the United States to lead in this space so that AI is informed by our values. And of course, today we are talking about a critical tool in guaranteeing American dominance and American leadership in this space.
▶ 1:57:18And that is of course export controls and what feels like an ever evolving position by the current administration visav uh export controls. And if you are someone who believes in export controls, we obviously want to make sure that those tools are as effective as possible that those controls have integrity. Uh and so Mr.
▶ 1:57:45Feiner, I'd love to come uh come to you first recognizing that that no policy tool is is perfect. There are limitations of of every tool. um what are some of the difficulties uh that come with enforcing export controls that the US federal government that commerce has experienced in the past representative one difficulty historically has been the resources allocated to enforcement
▶ 1:58:15to the uh BIS as we've discussed and by the way this body should get a lot of credit for working to enhance uh those resources more people means more enforcement and I think that is fundamentally a good thing. Uh second, and and we've talked about this in the course of of this hearing as well, uh particularly when it comes to uh adversarial uh countries, hard targets, if you will, uh like China, access to information can be extremely challenging even with the most uh rigorous in enforcement.
▶ 1:58:44And so for example, you know, know your customer requirements that are well-intentioned and uh important can be very difficult to enforce in practice uh just because the information base that is being drawn upon uh is deliberately uh opaque. Uh entities use all manner of evasive uh tactics from shell companies to just outright uh obfiscation and and lies to try to hide their hand. And so there is this ongoing cat-and- mouse game.
▶ 1:59:11So to me, the most important uh aspect of of enforcement is that it has to be ongoing and vigilant and iterative. It is not a a one-off.
▶ 1:59:20Well, that that leads me perfectly and I I think I can guess what you will say given given that answer, but that leads me to the topic that I know a couple of my colleagues have brought up, which is last night's rule from the Commerce Department on the H200 chip sales. Um the the new rule prohibits the sale of chips for any quote military end use quote military intelligent intelligence end use or to a quote military or quote military intelligence end user with compliance hinging on the department's licensing and licensing and vetting process.
▶ 1:59:51So given the existing backlog at BIS and past challenges enforcing controls because of limitations among the enforcers, how confident are you that the US can sell these advanced chips to China while reliably ensuring they're not diverted to military
▶ 2:00:08Look, it it gives me great concern. I think it would be a very appropriate topic for uh interrogation and oversight by by this body. And in addition to uh the ability to to actually enforce effectively this rule, I I think the other area that we've not really touched on is what a dangerous precedent it could be if this same approach is applied to even more advanced chips uh going forward. And and and you know, nobody has indicated that that is the plan.
▶ 2:00:33But if past president is predictive, then then I think that's something that we should be watching for very carefully because applying this approach to Blackwells, for example, I think would be even more dangerous.
▶ 2:00:42Thank you very much. And I'm out of time, but I just want to thank all three witnesses because you've been incredibly helpful today with your opening statements, with your answers on this important topic, and I yield back.
▶ 2:00:52Representative Mills is recognized.
▶ 2:00:54Thank you, Mr. Chairman. Uh I wish my colleague was still in the room, but I wanted to talk a little bit uh in response to her Venezuela comments. You know, as we look at the illegitimate leader of uh Venezuela Maduro and his actual position as a cartel leader, knowing that that the president has designated him as a terrorist organization and removed them, what we're missing is this.
▶ 2:01:17Yes, the illicit drug trade that was going on has been prevented as a result of the Department of War and the Secretary of War's actions when it comes to stopping these cartel boats from coming in. But this was never really just about oil, just about drugs, just about the removal. It's also about the denial of resources. And what we have to understand is that China, Russia, Iran, North Korea, this geopolitical alignment, this axis of evil, if you will, is what we're actually up against.
▶ 2:01:44Not a great superpower competition, but actual adversaries. And the president understands that. And when 70% of China's actual oil capabilities and energy comes out of Venezuela and Iran as they're buying up all those sanctioned oils, this actually puts further pressure on them. And that's what we need to do whether it's in a military economic or whether it's in a supply chain resource or in the AI space.
▶ 2:02:07America has the ability to advance well beyond not just in the AI field but in the quantum entanglement space and the AI autonomous self-healing drone capabilities etc. And that's why it's so important. But I want to correct one thing and I just want to make sure that I understand this correctly. We keep talking about the H200 chip. Now we we sell military hardware to many nations.
▶ 2:02:28But what we do is is that we actually diminish some of the things whether it be targeted packaging or certain types of electronic advancements and making sure that the US always stays superior in every single way. But what would be the categorization of the H200 in I guess a similar thing to the 950 that Huawei makes? Anyone have any idea what that comparison would be between the two?
▶ 2:03:02Yeah, I think there are a number of different dimensions that these these things get measured on in terms of you know whether it's literally processing power, memory and so forth. Uh depending on your dimension, H200 is sort of comparable or superior to the the best that China otherwise has. And and I would just also note that China is not one of the countries to which we send weapons with slightly reduced targeting packages.
▶ 2:03:28Well, look, at the end of the day, we need to ensure that we're always going to be ahead when it comes to China and the CCP. We need to understand their threat they play in the Indopaccom, but also looking at the advancement of the Trump coralary to the Monroe doctrine to keep the Western Hemisphere secure and safe. And that's all well and fine. But according to Nvidia, when they talked about the H200 chip, they talked about the 950 being almost to an equivalent and looking at the 960 that they're developing for 2027 and the 970 which is look to be developed in 2028.
▶ 2:03:58And I wanted to get your your thoughts on
▶ 2:04:00Yeah, I think there's there's a question of qualitative improvements by Huawei and the quantitative. Qualitatively, it's going to be a few years, according to Huawei's own analysis and and and analyses of of their analysis, looking at that, it's going to be a few years before they catch up uh to H200's, but even then they're not going to be able to make nearly as many of them as uh what we're preparing to sell. So, it's it's like right now Huawei is a bunch of MIG 21s.
▶ 2:04:30Uh you know, it's getting a little rusty. They're trying to buff them and shine them. H200s are F-35s and we're saying, well, hey, we're giving F-35s, but we're going to have this great F47 just around the corner. Uh, so it it just doesn't make sense. I mean, you could make that case if if this were an ally of the United States. This is, you know, someone who's going to actually be enhancing our our deterrent. This is straight into the hands of of a sworn enemy. I mean, that's how they talk about us, right?
▶ 2:05:00That's exactly right. And not to mention just a sworn enemy, but they've gone after the idea of that geopolitical alignment to essentially try to eliminate the dollar as a global currency. That was their entire intent. That was the intent of the belt and road initiative was to gobble up all the natural resource capabilities, rare earth mineral mine capabilities, which is why they were so invested in the 15 of 16 rare earth mineral mines in Africa. Now, I wanted to talk about capacity because one of the things that the Department of Commerce had talked about before is that Huawei can only produce about 200,000 AI chips in 2025.
▶ 2:05:29But it showed that they had actually shipped about 800,000. And so I wanted to validate is that actually true or is that some type of a propagandized messaging out of the China CCP. So uh in terms of the demand signal um so what what I I'm reading is that Chinese companies are ordering millions of H200s. It's not clear whether the Chinese government is going to allow them to import that many because
▶ 2:05:55they actually banned that today. By the way, as of as of today, China actually banned and denied the actual uh approval of the H200s from coming into China. And that was just released just a little bit ago. So to your point, it
▶ 2:06:06it looks like they're going to approve Chinese companies you buying H200s. In some cases, they're going to say, well, you can buy them to build data centers outside of China to wipe out American hyperscalers business.
▶ 2:06:18And that's ultimately their job. And as uh the the emmeritus uh chairman had said uh China's always been about stealing intellectual property from American businesses. We have to protect American businesses, American ingenuity. We need to advance the America first agenda and the way we do that is to make sure that we are always at the advancement above China and our adversaries. With that I yield back.
▶ 2:06:36Representative Self.
▶ 2:06:38Uh thank you Mr. Chairman. I want to go back to our allies. Um because the Europeans and the Japanese are you convinced uh and we'll go down the land left to right that we our trilateral negotiations have reached the point where our allies understand our concerns.
▶ 2:07:02I'm sorry sir that that our allies have understand our concerns about their lesser export controls to China. they they certainly know uh they've they've heard those arguments made uh extensively by the last three
▶ 2:07:17So what progress have they made
▶ 2:07:20Um I I would actually defer to John Feiner on where we were a year ago.
▶ 2:07:28Sure. So uh when it comes to uh the most advanced tools that are manufactured in Japan uh and and the Netherlands and the United States, I think we're basically at a level of parody when it comes to controls. When it comes to other manufacturing tools, uh our allies have not yet caught up to our standard and I think it it is an appropriate area of diplomatic focus has been for the last several administrations try to bring them up to our standard.
▶ 2:07:53The concern is that if and as we reduce controls that are placed on chips, which is a a sort of a a US uh area of advantage and capability, advantage our companies by reducing those controls, they will actually draw our partners the opposite lesson, which is that they are in some way entitled to reduce the controls on their companies, not increase them, which is what we need.
▶ 2:08:14And I think that's reasonable. Look, we've spent uh 30, 40 years trying to bring China into international order. Um and yet now uh today they have permanent normal trade relations status uh under Bill Clinton in 1997. Uh they have still have developing nation status through the UN and the World Bank although I think they have now declared they won't use it although I think that's a a tactical.
▶ 2:08:41So, do our export controls offset the advantages that China has through uh PNTR and developing nation
▶ 2:08:57To some extent it does to some I think it's a little bit apples and oranges. I think those those statuses you were describing go much more to China's ability to become a dominant producer. Um you know Mr. Pottinger was telling the story earlier of how they went to dominate telecommunications for instance and our granting of these statuses and treatment to them have let them take over so many of these areas.
▶ 2:09:22I think it's safe to say that if we don't have export controls, if we make the same mistake yet again of charging in and trying to addict them to our technology and giving them our tools, they will turn around and use those statuses that they have to dominate these areas as
▶ 2:09:37Yeah. And I think that's uh that's my concern. Um want to go back to I want to y'all to correct something because we have heard and I think there's a message out there that China is not producing military chips. They're trying to go into the domestic market and I think that's a messaging campaign on theirs.
▶ 2:10:00Can you either verify that that they are more concerned about their domestic uh uh use of chips as opposed to their military which I think is absolutely ridiculous because I think they intend to to build military. Can you comment on that?
▶ 2:10:14Yeah, I mean the the the Chinese strategy well-worn playbook is is capture uh copy and kill ca capture American technology and and replicate it, copy it and then kill the the American industry that provided it in the first place and then dominate. I mean it's explicit. They their their made in China 2025 strategy which is working out in many areas.
▶ 2:10:39its 10-year-old strategy calls for China to have a monopoly or virtual monopoly globally in in most of the important technologies of this century. Um, so it I think it speaks for itself.
▶ 2:10:56Just to add briefly, it's important again to remember that this is an authoritarian communist country, right? We have US tech companies that may choose not to do business with the Department of Defense. The idea that Deep Seek would develop some sort of breakthrough that could be valuable to the military and then turn around and say to the Chinese Communist Party, uh, I'm sorry we agreed we weren't going to share this with you. It's just it's laughable and it shouldn't be a basis for how we structure our controls.
▶ 2:11:24Yeah. And I just want to we've had this conversation about this agree or this this selling our chips, but we all know and I just want to make this point before before my time runs out that we used to set a limit in Congress and or BIS in Congress and then Nvidia would design a chip immediately underneath that standard. We just need to be careful we don't go back to that model as well. And Mr. Chairman, I yield back.
▶ 2:11:49Representative yields back. Representative Dean.
▶ 2:11:52Thank you, Mr. Chairman. And thank you to uh gentlemen for coming in for testifying on this very very important set of issues. Uh I apologize I was delayed in being here because we also had a very important hearing sadly Democrats only on the issue of Venezuela and is what is next.
▶ 2:12:10Uh and I do hope I implore uh our chairman to make sure we have hearings, thoughtful hearings, including u the White House, the administration around the attack on Venezuela that was made with thorough planning and exquisite military ability uh and absolutely no consultation with Congress. Uh we are Congress.
▶ 2:12:33we are able to actually take in sensitive information and make decisions on behalf of the American people. Uh on this set of issues, I thank you all for testifying. Mr. Feiner, I was thinking of you uh as I read your testimony.
▶ 2:12:50Uh you you rightly give the Trump administration, first Trump administration, I I I'll read from your testimony, deserves genuine credit, updating US assumptions and strategies to make competition the hallmark of US policy toward China.
▶ 2:13:06Um uh in your testimony you also state that China's leaders increasingly see AI as not just one of many technology priorities but as the critical uh technology that will enable their economic and military ambitions and I'll say it again their economic and military ambitions. Mr.
▶ 2:13:26Cass, you stated any export of advanced AI chips or chipm equipment to China must be understood as supporting its military either by empowering its leading AI labs or by directly providing computing power to the people's liberation army. Uh for both of you, uh can you talk more about what dangerous PRC military capabilities could be enabled by access to the most cutting edge US ships?
▶ 2:13:57Well, it's interesting. um a representative I'll read you a quote that's not from my testimony but frankly could have been which is uh that advanced AI compute is essential to the AI era enabling both economic dynamism and novel military capabilities denying our foreign adversaries access to this resource then is a matter of both geostrategic competition and national security and that quote is from the Trump AI action plan from July 2025 so I fully agree with that I suspect although I won't speak for them
▶ 2:14:27my fellow witnesses today uh fully agree with that quote and believe that US policy should be conducted consistently with that principle that's articulated there in terms of what the specific dangers are of not adhering to that we've talked about a number of them uh today there have been recent disclosures in particular in the cyber security domain about uh very sophisticated very advanced uh and even effective AI enabled cyber attacks that have been conducted by manipulating uh advanced large language models and American and
▶ 2:14:58advanced large language model in this case, but from a Chinese uh threat actor. That's one area of I think significant national security concern. We've talked uh as well about uh how AI can enable more sophisticated, more advanced military planning and the conduct of military operations as well as intelligence capabilities. Uh we've talked about the biotechnology implications including the development potentially of novel weapons and pathogens. The list goes on.
▶ 2:15:23uh but the principle that was articulated in July 2025 by the current administration I think is one worth uh reverting to
▶ 2:15:30and and what was the reason for the change and I want to layer in the 25% fee to the United States government. What happened here?
▶ 2:15:39I'm I'm the wrong person to answer uh uh what the reason is for the change or or internal uh uh considerations by this administration on the the fee that you described. Uh again I think they should answer how they think that is sort of broadly a beneficial thing. Uh but what I would say is another good principle to adhere to is that that fee does nothing to mitigate the national concern security concerns associated with reducing the export control.
▶ 2:16:06So whatever other benefits are perceived it does not diminish the concerns that I think all of us have expressed about enabling these very advanced chips to go to China. So I don't believe that that paying your way out of those national security concerns is a is a good way to
▶ 2:16:21to your point and it won't pay your way out. It does not bypass uh the security concerns and I know I have limited time but Mr. Potinger, Mr. Cass,
▶ 2:16:32I would agree with what uh what Mr. Feiner said. I I would just add to to your question about what has changed. You know, I think the the public reporting has indicated that uh you know, members of industry that are very eager to earn money selling chips have had an outsized influence on what the policy has become and and that underscores why it is uh incumbent on Congress to to act in in the American people's interest.
▶ 2:16:58Thank you. Appreciate that.
▶ 2:17:00I agree with that.
▶ 2:17:02Thank you. Thank you all. Thank you, Mr.
▶ 2:17:04You're welcome. And absolutely uh in addition to the classified briefings that this committee has offered on Venezuela, we'll make sure Democrats have the opportunity to complain about enforcing existing laws and conducting the arrest of criminals who have warrants against them like Maduro. And I now recognize Representative Kim.
▶ 2:17:26Thank you, Chairman. Um I want to thank our witnesses for joining us today. The competition with the Chinese Communist Party in artificial intelligence is not theoretical, right? It's already shaping military power and economic strength. AI will define how wars are fought, how intelligence is gathered, and how authoritarian regimes project power beyond their borders.
▶ 2:17:54And there are many components to AI leadership, but the evidence shows that advanced compute is the single most important advantage the United States still has and the CCP is determined to Mr. Pottinger, based on your experience, how critical has chip access been in slowing or accelerating China's military and intelligence modernization? Nice to see you, Representative Kim.
▶ 2:18:23I um a better authority than me would be Chinese AI uh scientists themselves, and they they characterize it as a decisive issue. Um I I I had mentioned earlier in my testimony that um one of the lead scientists of of a leading Chinese AI firm just a few days ago at Chinua University, they held a summit, an AI summit said, "We'd be lucky if we have a 20% chance of seeing a Chinese company as the lead
▶ 2:18:54AI company 5 years from now." And that's because they cannot make chips and they can't buy them until uh unfortunately uh now. So hopefully we we'll we'll be able to row that back.
▶ 2:19:07You know, despite massive state subsidies, um what are the real constraints uh China still faces in producing highquality AI chips at scale?
▶ 2:19:19Um there many uh constraints. the the equipment is not available uh for for making the most advanced chips like those that are made in South Korea and especially Taiwan and and in increasingly starting small in Arizona. Um and so that that is an that is a feature of export controls and in fact President Trump in his first term was was you know really laid the foundation for this.
▶ 2:19:45The Biden administration built uh uh mightily on that foundation and President Trump in his first few months continued to build on it further until sort of this inexplicable uh
▶ 2:19:59You know, are there's uh warning signs that Congress should be watchful for? Um and that would indicate America's compete advantage is being eroded before it becomes irreversible. Uh, in other words, that that the US advantage, uh, yeah, we we should not take it for granted. Um, every month counts in this in this race.
▶ 2:20:26We're starting to see AI capabilities really taking transformational flight this year. Um, and so every month counts. But my my point is that people who argue that export controls are are just, you know, they don't they don't work or or they eventually atrophy in this race uh where every month counts. They're actually decisive. I think it's the most powerful tool we have uh to win.
▶ 2:20:55You know, thanks to Chairman Mass for introducing AI Overwatch Act. We have now the legislative tool that provides an essential layer of congressional oversight of powerful American chips to make sure we are not seating our innovative and sensitive technologies to adversaries.
▶ 2:21:13I know China is making advanced AIs chips but uh they also rely on the products that we are also selling to them right so I don't know we if we need to uh enable them but I just wanted to mention that um I in the time that I have um I want to talk about the export controls right they have worked but only when they are clear if they are enforced and if they are aligned with our allies and I'm concerned that loopholes and weak oversight risk
▶ 2:21:43undoing the process that we have made. So let me ask Mr. Cass a question here. Where do you see the greatest disconnect today between stated US export control policy and how that policy is implemented in practice?
▶ 2:21:59Well, I think the gap is exactly what we've been talking about here today, which is that our stated policy is we will deny computing capacity to our adversary. uh and yet our latest policy choices seem to be attempting to supply computing capacity to our adversary. So I I guess that's a fairly large gap.
▶ 2:22:17Um Mr. Pottinger, quickly um can you talk about how uh and where the US export controls on AI chips been effective and where are the biggest uh they they've been extremely effective in um restricting frontier models and basically China's ability to catch up with the most powerful uh AI models.
▶ 2:22:42They've been export controls have prevented China's chip industry from being able to make their own chips uh and to catch up with Samsung and Taiwan Semiconductor Manufacturing Corp. Um, so I again in according to China's own leaders, Cigin Ping uh in in a sign of I think desperation not confidence is just throw thrown another $70 billion last month at $70 billion US at trying to fix the the
▶ 2:23:12uh gaps that they have in chip
▶ 2:23:15Great. Well, thank you very much. I owe my time.
▶ 2:23:19Representative yields back. Representative Kaine.
▶ 2:23:22Thank you, Mr. Chairman, and thank you to our witnesses for being here today. Maintaining American leadership in the AI arms race is critical to America's economy and national security. As the role of artificial intelligence increases, Americanmade chips have increased in demand globally.
▶ 2:23:43While such demand for US exports is encouraging, Congress must work with the Bureau of Industry and and Security to ensure that our export control regime prevents bad actors from obtaining powerful AI computing chips. We must ensure their export control uh export control support American businesses while preserving American security in both physical and the digital realms. Mr. Potinger.
▶ 2:24:09A critical part of the AI race is controlling access to advanced computing power. Effective control requires effective enforcement. Yet, the Bureau of Industry and Security often lacks timely information about violations. The Stop Sealing Our Chips Act, which I introduced with my colleague, Representative Johnson of Texas, addresses this enforcement gap by creating a whistleblow incentive program. Can we win the AI race with export controls that lack effective
▶ 2:24:41We cannot.
▶ 2:24:42And how important are whistleblowers to improving chip control enforcement?
▶ 2:24:47Yeah, I I'm eager to learn more. Anything that that strengthens our ability to enforce is a step in the right direction. Um uh but uh you know we're we're we we should not kid ourselves that we'll be able to uh track where every chip uh or other piece of advanced technology goes in China.
▶ 2:25:10Uh we'd be better off simply denying you know having a a presumption that we should deny that technology from flowing anywhere into the Chinese ecosystem. And so what conditions, standards, and enforcement mechanisms would you attach to the sale of advanced chips to ensure the US
▶ 2:25:27if I may s I I would I would uh like to submit something after the the hearing after I've had a little bit of time to to give you a more thoughtful answer to
▶ 2:25:35Okay. And so Mr. Ponder uh research from Georgetown Center for Security and Emerging Technology documented how China's uh People's Liberation Army has accessed USmade AI chips for weapons AI technology has empowered the Chinese Communist Party's surveillance state and the censorship of its own people. To win the AI arms race, we need to understand what we're up against.
▶ 2:26:02What can the Chinese Communist Party accomplish with advanced AI chips in terms of military surveillance, censorship and strategic applications? The sky's is the limit for them because these this technology is so pivotal uh that it means that all of you know nuclear uh weapons um uh biological weapons. China has a biological warfare program that uh is in violation of uh international treaties.
▶ 2:26:32uh bio biology is an area where AI in the commercial space is already having a major impacts. We should not assume that Beijing isn't looking for advantages from AI for biowarfare. Um and the list goes on.
▶ 2:26:48Uh thank you. Uh Mr. Cass, when we talk about the AI arms race with China, we often discuss it national security drums. But what are the economic states if China achieves AI dominance?
▶ 2:27:03Well, I'm glad we're we're talking about the economic side of it as well. Thank you for the question. I think what's so important about AI as a general purpose technology is it's going to diffuse everywhere in our economy. It's going to determine how well we innovate and and advance in technology. It's going to determine how well we advance in healthcare. It's going to be incredibly important to manufacturing and and our ability to rebuild our industrial base.
▶ 2:27:27And you know, right now, this is one of the few places where we really do have a technological lead over China and something we can really lean on as we pursue the administration's agenda that's trying to re-industrialize. Uh if we if we lose that advantage, we will find ourselves uh falling further behind in in a number of areas where we have challenges. Now,
▶ 2:27:50thank you for the your insights and those the insights of the panel. I yield
▶ 2:27:56Representative yields back. Representative Shrief.
▶ 2:27:58Thank you, Mr. Chairman. Hey, I appreciate the uh the testimony of our witnesses. Uh I've uh been able to uh participate all morning and I have learned a lot. I'm a freshman member. You're down to freshman row here uh from Indiana. Uh and I don't come out of the industry. Uh but I have been planted here because this space is so important and that we learn from those that have been wrestling with this as you all have for many years as u as as we uh form policy.
▶ 2:28:28Um Congress of course passed the chips act back in 22 and that was led by my Indiana friend and colleague uh Todd Young uh $50 billion and I I point out that 50 billion because I'll make another point in just a moment. Um I mean those investments both from domestic and foreign companies were on full display at CES last week. I've been out there in the past not able to do that in this role.
▶ 2:28:53Uh but uh we see that dramatic innovation in AI in part arising from our country's investment uh in that chips act. Uh Mr. pass. Do you agree with the premise that our greatest strength in the AI arms race uh lies with our ability to ramp up domestic production of these very high-end chips?
▶ 2:29:20I think it's definitely a a a force multiplier for us. Um we right now thanks to export controls we have had in place have primary access to chips coming from our allies as well. The more that we are able to produce ourselves, uh, the more we will control our own
▶ 2:29:37Yeah. Well, uh, well, let me weave this in with a couple things that kind of tie back to my Indiana district. I mean, progress is clearly being made. Um, we've got had investments from companies like TSMC, Intel. Uh, MediaTek uh, specifically has partnered up with Purdue University in West Lafayette uh, for uh, a newly open uh, semiconductor design center uh, proving out success there.
▶ 2:30:01So while we uh we the US remain a in a strong lead position over China, we lag in other critical inputs in my view. Um my colleague Annie Bar also from a coal state uh made the point on energy. Um, one stat uh uh I pulled uh is that uh by 2030, China's going to amp up their I wasn't trying to be clever, but yeah, amp up their uh uh capacity by 400 gawatts.
▶ 2:30:31That's like 40 Manhattan uh at peak demand. I mean, they're going to have a huge power advantage relative to us just by the end of this decade. Uh also talent. Uh we produce some good AI development talent in Indiana at Purdue, Indiana University, Notre Dame. Uh but we're but China's uh developing fully half of the AI engineering talent today. Um and then capital.
▶ 2:30:58The Chinese government's put 55 billion in uh toward this initiative. I mean, they're analog in some respects uh to to uh to our 22 legislation that Todd and Schumer uh led on. So Mr. Pottinger probably the best person to put this too. Is it possible for the US to win the AI arms race solely by outperforming China in production and computational power? Is it possible?
▶ 2:31:26It's definitely possible and by Chinese scientists own admission it's happening especially at the frontier end. Uh and it is primarily as you point out uh not because our scientists are better that we make it more electricity to your point. China can burn as as much coal as they want. They build a lot of these these plants uh very quickly.
▶ 2:31:49So the the pivotal advantage that we hold is actually on um on compute. Now that doesn't mean that we shouldn't be doing everything that we can to expand energy production. Uh and and that means traditional sources. It means you know hopefully we'll have a breakthrough in nuclear fusion.
▶ 2:32:12Uh there already been breakthroughs in fision and uh you know relatively uh uh efficient and safe uses of fision nuclear you know it's going to have to be an all you know the the whole uh pie chart of different sources of energy. Um so we should not assume that purely because of our advantage in compute that uh that that we're going to win but if we surrender that advantage forget about it
▶ 2:32:38but it is possible in your view to win.
▶ 2:32:41Okay. Absolutely.
▶ 2:32:42Very good. Uh my time is expired and I yield back. Mr. Chairman,
▶ 2:32:44Representative Davidson.
▶ 2:32:47Uh thank you, Chairman. Thank you to our witnesses for just a timely, very critical uh hearing and uh a topic that is absolutely vital that we get right. So I want to thank all of our witnesses for really one of the most essential subjects that we nail, which is uh artificial intelligence. I was proud this past month to join Chairman Mass AI Overwatch Act as a co-sponsor. Reality is that the future of the global economy and our geopolitical security hinges on the future of chips and AI.
▶ 2:33:17Uh congressional oversight on this issue is vital and um I'm also the chairman of the subcommittee for national security and elicit finance. One of our main cha challenges this year is to update and modernize the Defense Production Act, which of course is used more broadly than in artificial intelligence. Um, and I'll open it up to the panel.
▶ 2:33:41Um, as we modernize the Defense Production Act with artificial intelligence in mind, but maybe more broadly, what things are essential that we get right? Well, yeah, I think to to the as as your question implies, uh, Congressman, uh, AI, given that we have already a significant advantage in AI, um, that should be integral to our defense
▶ 2:34:13Um, I mean, I've seen the posters uh at at the Pentagon uh that, you know, I want you using AI. I mean it it's this should be one of the things that allows us to produce faster on demand without having to do these long-term u contracts to produce munitions for example. Uh but that would be just one very important example is munitions.
▶ 2:34:37It doesn't do us much good to have the most exquisite platforms, ships, aircraft and so forth in the world if if they're going to run out of ammo quickly.
▶ 2:34:45Yep. Thank you for that, Mr. Finer.
▶ 2:34:47Uh first of all, I agree with everything Mr. Potinger just said, I would only add and I'd want to come back with with a more sort of specific answer as to the the key areas uh that the United States does not have stateowned enterprises that the government can just simply direct in areas of strategic importance or policy priority.
▶ 2:35:06But we do have certain tools available to us and the defense production act is a big one that enable us in areas of uh kind of overriding overwhelming national security importance to the country to direct the private sector uh in ways that are strategically consequential. And so this tool I think has not been used as much as it could have been and should have been over time.
▶ 2:35:29uh and so I think exploring uh ways in which particularly for something as important as uh winning the AI race using the defense production act makes good sense and is a a constructive area for commerce to focus.
▶ 2:35:40Yeah, thank you. Uh and of course AI is going to go across lots of things and so to the extent you talk about other sectors really AI is just going to be integrated with how we deal with that. So the mantra of the Trump administration has been to derisk critical sectors of our economy um and to some extent particularly with respect to China.
▶ 2:35:58I was pleased to work with the committee uh to write and introduce the biological intellectual property protection act of 2025 and to co-lead the effort with representative Hulahan and in the House and Senator Cotton uh across uh the capital there in the Senate. Our biotech sector is one of the most important and promising uh innovation sectors for our economy. Our public and private uh R&D institutions are worldclass leaders in creating next generation uh cures.
▶ 2:36:26Uh and the unfortunate reality is that many of the labs that uh turn synthetic DNA code into usable sequences operate out of China even if they are owned by American companies. Under Chinese law, all that IP goes through these labs becomes property of the Chinese Communist Party. Each year, billions of dollars in intellectual property are stolen through supply chain weaknesses such as this. Our bill would allow existing export control policies to regulate uh export of high value biotech. Mr.
▶ 2:36:56Pottinger, um Chinese IP theft spans nearly every information sector of the economy. How can we use export control policy to mitigate these risks? Um I I would still go back to the controls on powerful chips and and uh since since uh AI is going to sort of China's advances or ours uh in in the biotech space.
▶ 2:37:26So I think that this this could be pretty pretty powerful if if we actually row back uh the mistaken decision to start providing China with advanced AI u computing capacity. It it actually gives us a leg up in biotech.
▶ 2:37:42Yeah. Thank you. And I yield back. Representative yields back. Representative Smith.
▶ 2:37:47Thank you so much, Mr. Chairman. Thank you for calling this very important hearing. Um I read with great interest, Mr. Potinger, your your essay that you would sent to us uh very well done. Um and uh you point out that why 2026 could prove as important as 1989 and then build a narrative based on that.
▶ 2:38:05Uh I would say one of the most important transformational things that happened uh under the Clinton administration was on May 26, 1994, Bill Clinton de linked human rights from trade u in a bipartisan way. We opposed that vigorously. I went to China uh before he did it because there were indications he was going to uh which would just unleash hell on the human rights community there, democracy activists and of course put us and everyone else at risk. uh and he just did it.
▶ 2:38:33And then by the end of the 1990s or near the end, Christopher Cox did that that very very important piece uh the Cox Commission about how there was such a transfer uh and courtesy of US corporations and multinational corporations of so much of our technology. And I worry and I worry a great deal as I know you do as well and others about how the the inability it seems of many of the people who make a lot of money to see the implications of that dual use technology.
▶ 2:39:03I had a hearing in here in 2006 on Google uh and Cisco Microsoft as they were transferring all of this technology to the Chinese Communist Party. Uh, and it's it's they didn't care. And you know, I even quoted IBM and the Holocaust, a great book that talked about how IBM and Aiden embedded the Holocaust in the Gustapo. And I said, "Here we go again. They're doing it." So my question is, um, or questions.
▶ 2:39:27I do co-chair the Congressional Executive Commission on China, uh, whose mandate is to document the PRC's non-compliance with international human rights standards. Last month, the Australian uh Strategic Policy Institute issued a report on how China's new AI systems are reshaping human rights.
▶ 2:39:47One of the topline points is that the CCP governance model is being honed into a quote precision instrument for managing its population and targeting groups at home and abroad. Among the developments is the ability to preemptively suppress disscent by predicting content before it's posted online. Sounds like something from the Minority Report. Uh where crimes are preemptively stopped before they happen in that in that movie.
▶ 2:40:14Can you elaborate on the implications AI has under the control of the Chinese Communist Party on human rights issues? And what about preserving historical memory? You know, one of the things that that that even Google did, we actually showed it. When you did the Google search back in 2006, put in Tianaan Square, nothing but happy pictures of people smiling and and and visiting the square. Nothing about the tanks, nothing about the Tiana Square massacre.
▶ 2:40:43How will might that have shape
▶ 2:40:46Congressman, thanks for your decades of leadership on uh on human rights. if we had listened uh to you all those years
▶ 2:40:55and others
▶ 2:40:56and others um you know well it would be it would be an even worse irony. I mean we essentially um in pursuit of trade sacrificed our principles on human rights three decades ago um which which has put us in this difficult position visa v China. It would it would be an even more egregious foul if we were to sacrifice our national security in pursuit of trade. So, let's not compound the mistake we made a quarter of a century or so ago.
▶ 2:41:22Uh, look, we're already seeing ways that Beijing is using AI uh to surveil uh and to repress uh and to manipulate public opinion. And that's not only within China, it's now increasingly on our own shores as well. Uh Tik Tok is a is if you like a primitive form of AI that has already had very uh destructive effects uh on u democracy and free speech in the United States.
▶ 2:41:52And that's because there is plenty of evidence and and this is this is long before you know open AI was was a major thing right we're talking about a technology that was developed years ago. they're able to uh either suppress speech through the algorithm which is uh or or to uh you know promote speech uh that's true of of uh of social media but when it is regulated uh by a
▶ 2:42:22not not the United States uh government in where we have first amendment protections but in fact the algorithm is being governed in Beijing by a totalitarian dictatorship. It means we are sacrificing free speech in the United States uh uh by by deferring to Beijing to decide what what speech trends or is barely seen by anybody.
▶ 2:42:45Uh so I I think it only gets worse as the AI gets better and that's why we don't want our AI regulated by Beijing. Beijing is going to be regulating our AI if Chinese companies are in the lead and and their AI starts to become adopted heavily by uh much of the world whether it's you know in here in the United States in Western Europe with democratic allies or in in in the parts of the world where most people actually live you know in the global south
▶ 2:43:16uh uh and and all the places in
▶ 2:43:19Thank you so much. Thank you.
▶ 2:43:21Representative yields back. Representative Bumgart.
▶ 2:43:25Well, thank you, Mr. Chair. I want to uh congratulate you and thank you for holding this uh this great hearing. We had a great uh uh first year uh in uh in House Foreign Affairs and uh this committee certainly off to a really fantastic start uh with this hearing. Uh gentlemen, I want to thank you for being here. Uh uh I've read all three of you. I wish uh Mr. Cass was still here, but I've read all three of you and and Chai, you all do really important work. Uh earlier this year I had the opportunity to visit China uh as part of the first house delegation uh since uh 2019.
▶ 2:43:55Got to meet the Chinese premier. Did a lot of research and study uh ahead of time and really appreciated the trip. I just wanted to relay a couple things that stood out with me uh for me from the trip. Uh we had dinner one evening with a number of western um uh ambassadors uh on the trip and the comment that stood out most to me from was one of those ambassadors said hey you know you think the America's that America is trying to decouple from China you have to understand that at whatever speed you think you're doing that China is working at double the speed to decouple from
▶ 2:44:25you. Uh so that was a comment that stuck out. Another comment that stuck out uh from that trip with me is we were uh meeting with a a a uh the country head of a leading US technology firm and I was discussing and asking comparisons between India and China in in the tech space and why they wanted to be in the country given all the intellectual property theft, given the other issues and this uh this western uh head of this western company said we have to be in China because of the amount of innovation going
▶ 2:44:56on here in the country. and what the the competitive destruction uh that takes place in the in the aspects of China that are capitalist at the bottom end of their economy. The competitive destruction that they needed to be there. Uh so I just want to relay those two questions. One of the benefits of being or those two comments. One of the benefits of being a freshman uh in Congress is you get the blessing of hearing so many people ask questions ahead of you that you don't have to uh go over retro uh areas.
▶ 2:45:23But uh I would like to hear uh from both of you about data centers and the importance of uh data set data centers in the IRA and then you know as I look at China you know I want us to avoid a war with China and I think the best way to do that is prepare for war with China. So that's a prism in which you know I look for things I certainly again want to stress how much I war with China but you know China is strong but brittle.
▶ 2:45:47they have uh a lot of strengths and that innovation, the competitive uh bottom part of the the the country. Uh certainly being a a command dictatorship allows them some flexibility and speed which we don't have. Uh they're whipping our tail when it comes to power production. You know, that's an US problem as much as a they problem. But they also have some real weaknesses that that that that we know about in terms of um their demographic challenges.
▶ 2:46:14uh uh their ability to attract and retain capital with their their capital controls, the problems with their property sector, things that you guys have written and talked about. But, you know, their other weakness is they alienate a lot of their u near neighbors and uh folks aren't exactly uh eager to sign up for uh Chinese uh global domination. So it seems to me, which is all a long preamble to say, that it seems to me that we should really be having this AI strategy conversation with our allies, particularly the Quad.
▶ 2:46:45And so if you could address uh expand maybe a little bit on on data centers and then if you could also address what you uh if you think that we should be having this conversation with our allies whether that's a possible conversation because uh you know folks that would uh hear from have consequences from China leadership and the AI certainly will be us but it'll be Taiwan and Japan before it's us and I think it would beneficial to members of Congress to think about this uh conversation with our allies
▶ 2:47:15and what what might China and Taiwan like to see from us, you know, and maybe the Indians as well too. So maybe you guys could go from there.
▶ 2:47:22Congressman, thanks so much. And you're you're absolutely right or whoever was uh your dinner companion was who said, "Look, China is trying to decouple from us a lot faster than we are from them." That is the explicit goal of their last uh 5-year plan. It was de m make the rest of the world dependent on us. make us China independent of the world. The the premier of China now late premier Lee Kiang when we met with him in 2017 he foreshadowed this.
▶ 2:47:51He said uh in it's only a matter of time he said before China dominates every technology of the future including AI and America will sell us nothing but corn and soybeans.
▶ 2:48:00Just in time can we hear from Mr. Finer maybe on the regional thing and I apologize for speaking too long in my
▶ 2:48:07Uh thank you representative. I I very much appreciate you raising the issue of of partners and allies as a sort of force multiplier for the United States. It is a unique American advantage in the world. There is no other country that has this network of relationships around the world that we have.
▶ 2:48:24Certainly China does not have that largely because as you indicated they have a tendency thankfully to overplay their hand, behave in a a coercive manner and alienate countries that might otherwise be at least somewhat sympathetic to some of what they're trying to accomplish. Uh which gives a big opening for the United States. Uh the Quad I I agree with you is a is is a sort of foremost forum for discussing these issues.
▶ 2:48:48It tends to be more focused on economic issues, but it has increasingly large part because of China's coercive behavior been willing to take up uh issues of national security importance as well. And I think a very uh constructive area of diplomatic focus for the current administration certainly was for us uh would be to enhance uh the Quad's focus on this exact issue at the nexus of uh critical and emerging technologies and national security.
▶ 2:49:14Representative Mullinar.
▶ 2:49:16Thank you, Mr. Chairman. Chairman Bular allowing [snorts] me
▶ 2:49:19chairman of the China Select Committee. Glad to have you join us today.
▶ 2:49:22Appreciate the opportunity. And uh I wondered if you could uh talk a little bit. Industry leaders are continually highlighting the accelerating advancement of AI systems in both the US and China and it's already being used on the battlefield in Ukraine. Uh I wonder if you could comment on how you believe that China with its advanced technology development ecosystem and disregard for human life uh will implement battlefield
▶ 2:49:54Congressman, nice to see you. the um look uh th this war in Ukraine uh started by Russia uh decisively enabled by Beijing uh is a laboratory and human beings are are the guinea pigs uh who are being butchered uh in the service of advancing uh the on on on the other side axis power um warfare wartime capabilities.
▶ 2:50:23So they are experimenting with um a fully autonomous uh uh lethal drones for example. Uh and it's you know it's this cat-and- mouse game. It's it's only only getting worse and they're acquiring combat experience uh on the other side not just Russians but a whole division of at least of North Korean troops.
▶ 2:50:45Uh there are reports uh from the Ukrainian government of Chinese soldiers uh perhaps mercenaries uh fighting uh there as well at least hundreds of them. Uh so yeah, we should we shouldn't think that there's some nice neat uh uh among the axis powers on uh using AI to the fullest extent possible to kill and win wars.
▶ 2:51:11I I'd only add agreeing with everything Mr. Potinger just said that there is no doubt [clears throat] that in the context of what the two countries themselves describe as a no limits partnership the PRC and uh and Russia uh that we focus a lot on the support that China is providing to Russia in the context of that war. I am confident that support does not come for free.
▶ 2:51:34And one of the things that China gets back in addition to trying to prop up really its only friend that has a a geography in in Europe only only significant friend is that it is getting data from the battlefield. It's getting data on how the components that it is providing that go into Russian weapon systems are performing. It's getting data on how this new AI enabled uh area of warfare is playing out in real time on the battlefield.
▶ 2:52:00And and by the way, uh just as China is drawing that data, that information uh into its own military and learning lessons from that, we it best be doing the same given how much work we are doing to provide uh help and support for Ukraine because as Mr. Pger said, this is a laboratory for modern warfare. Doesn't mean every war that comes after this is going to be the same. There going to be significant differences, but we should be learning those lessons and I'm confident that China is trying to learn those lessons.
▶ 2:52:27Thank you. Uh, I wonder if also you could uh comment on recent reports Nvidia plans to ship up to 2 million H200 AI chips to China with plans to ramp up production capacity for even more. At the same time, we're hearing about reports of short shortages of key AI chip components and that are leading to supply constraints for chips going to US customers.
▶ 2:52:52Thanks, Congressman. Yes, it's it's actually zero sum. uh many of the the Blackwell chips and other chips that American companies uh are buying from Nvidia use the same components uh high bandwidth memory for example uh that go into the H200s that uh Nvidia is preparing to sell to our adversary uh in China.
▶ 2:53:14So, uh, it it's it's self-evident that there will be fewer chips available for American companies as a result of, uh, building more chips for China.
▶ 2:53:28Uh, first of all, I would associate myself with uh, Mr. Potinger's comments. The limitations on on key inputs to chips are relatively fixed and and finite. He mentioned uh, I believe high bandwidth memory. uh that is the the most consequential one, but there are others as well.
▶ 2:53:45And so I think one area of appropriate oversight and scrutiny is what exactly are the trade-offs not just at the level of the fully uh finished chip itself, but at the level of the inputs to chips that will limit the ability of uh not just American customers, by the way, but allied customers from getting this product at the expense of of the Chinese getting
▶ 2:54:07Thank you both. And Mr. Chairman, I yield back. Yeah. Uh, Mr. Isa, I have to go to Representative McCormack if you don't mind and, uh, we'll go to you right after that. Representative McCormack.
▶ 2:54:20Thank you, uh, Chairman, and thank you, Mr. Isa, for yielding. Uh, thank you for both both being here on this very important topic today. I'm really excited about it because actually talks about the future of our industry and our prominence in the world right now. Uh I think it's been clear that our company should be the foundation of the global AI stack and sometimes that's in jeopardy when we put limitations on our ability to sell abroad.
▶ 2:54:42Uh one of the things that I was really excited about is when the president lifted the uh the prohibition on exporting the H200 chips from Nvidia. Uh realizing that it's probably not even the second it's not first tier. It's not probably even second tier. It's mainstream type chips. They can be used on multiple uh computers and other uh technologies. But if we don't sell it to China, uh my question to you, Mr.
▶ 2:55:07Pogar, is do you think that we become replaced by Huawang and other places that can produce something similar and then we become the industry standard? We become essentially the beta instead of the VHS for those people old enough to remember. Thanks, Congressman, for the question. you know, the the odds that Huawei is able to gain on Nvidia increase if Huawei has access to Nvidia chips.
▶ 2:55:37That's the irony of this. That's the paradox. China has already made clear that they're never going to let Nvidia dominate uh the Chinese uh uh market. In fact, even even though pres the administration has offered uh H200, Nvidia is offering uh perhaps millions of these chips, the Chinese government has not actually said that it's it's going to allow uh all of that to be imported specifically because they want to make sure that they are mandating
▶ 2:56:08uh the purchase of Huawei chips. So the goal the the explicit goal in Chinese policy and from the Chinese semiconductor uh industry association is is to ensure that Huawei dominates the Chinese market eventually no matter what. So what's interesting about that we kind of brought this on ourselves when we limit our ability to sell abroad uh technology can be otherwise produced uh we lose that competition and people go like well we need enough chips here. Well, we don't have a shortage of chips here.
▶ 2:56:37We can produce limitless numbers of chips. Uh, but what we've done is now created a a gap what's been filled by another company and now we're in this pretty good and that's where we're at right now. And ironically, if you live if you read books like Chip Wars and you you see what put us be ahead of everybody to begin with is when people start copying you, they fall behind. So, it's as as Elon Musk once said, you know, I don't even worry about my patents. I only patent my stuff because I don't want people to keep me from using my own technologies. If you're copying me, you're behind me.
▶ 2:57:06But that's what the free market's all about. And that's one of the things I I like to point out is that we should never restrict people from our our basic technologies because we will lose our industry standard as the world uh trends setter. And I think we put ourselves at a real big disadvantage last administration.
▶ 2:57:21I I agree with you that when we're talking about free market economies, uh friendly rule of law, you know, law-abiding democracies, I I'm a, you know, in favor of not restricting, uh, at least uh allowing significant access by friendly countries to that stuff. China is not a free market system. It is a totalitarian dictatorship.
▶ 2:57:45and and so, you know, by the same just like we wouldn't want to sell them F-35s in the interest of a free market, uh we should not be selling them, you know, AI that they could use to to uh create um commercial and military dominance.
▶ 2:58:01Sure. And and I'll point out once again, the H200 is not a a problem in that regard. So, I'm glad the administration has taken the the lift off that. Uh Mr. finer the gain AI act which which is no longer an issue right now but that's the kind of stuff that worries me when we start talking about a bill that would have restricted exports to China and other countries on the false promise the United States does not have access to chips and I'm talking about the ability to produce enough for us here domestically uh do you think it's a good thing that we got rid of that or or do you think there's another
▶ 2:58:31way to look at this because I I personally think we have plenty of chips as long as we don't inhibit ourselves
▶ 2:58:36representative I I do support without uh going into one particular piece of legislation or another, increased activity by this committee, by this body, uh to look at uh the concerns that we've expressed, those of us on this panel today, about uh the Chinese getting access to the most advanced technology that the United States uh produces.
▶ 2:58:56So, uh, whether it's the approach that you just described in in that former piece of legislation or others that I understand are under discussion, I am for taking a hard look at this from this body because I believe that US policy is most effective when the executive branch and the legislative branch are taking mutually reinforcing steps consistent with our national security. And I do have concerns uh that the number of chips that can be produced is finite. Maybe it meets today's demand, maybe it doesn't.
▶ 2:59:24But by all accounts, demand is exploding uh it predicted to explode in in the years ahead and there will be some trade-off as to who gets access to this uh most important input into the AI race that we've been discussing.
▶ 2:59:37Hopefully we can adjust on the go. Thank you so much for the time, Mr. Chair. Representative Isa,
▶ 2:59:43thank you.
▶ 2:59:48Thank you. I want to thank you all for being here long enough for me to get done with my other hearing. Um, I'm going to throw some numbers out here quick. Broadcom 10.5 billion dollars. Texas Instrument three billion. Micron three and a half billion. Nvidia 17 billion 13% uh market share. AMD 6.2 billion 24% market share.
▶ 3:00:12Qualcomm in my district 25.7 billion 66% and Intel 29% or 15 billion. That's the percent of U that these US companies have in sales currently to China. Those numbers ring pretty true to you. I'll take your word for it, sir. Okay.
▶ 3:00:34So is it fair to say no matter what we might want to do that we have a problem here which is we are addicted to selling to China just as we are addicted to buying from China. Is that sort of using the addiction word pretty fair? It's a better use than uh the fantasy that we'll make China addicted to our things.
▶ 3:00:56Okay. And I want and I want to follow up exactly on that point because I think you're exactly right. China wants one of everything we have. And notwithstanding, Dr. McCormick, having been a manufacturer and a patent holder, I can tell you that I have the same product but cheaper is why you do enforce your patents often.
▶ 3:01:17Is that even if they're copying if they're copying and stealing your market share and dramatically undercutting you so you never get the volume on your innovation, you never pay for your innovation. So, we have twofold. Clearly, Qualcomm cannot give up twothirds of its sales today, particularly when those sales end up in Android products around the world.
▶ 3:01:39That if they were substituted would effectively mean that they'd only be selling uh a fraction of that and only for the US market. So, I want to follow up with one concept for this committee. During the Cold War, we decoupled from the Soviet Union. Midway through the Cold War when Henry Kissinger uh very rightfully so saw an opportunity to create a wedge between China and Russia, we created an opening into China.
▶ 3:02:10That opening was in fact to deny to a great extent the Soviet Union that relationship where us versus them was the two of them. It's clear that they've reunited, but we have not decoupled effectively from China or Russia. Russia continues to supply a vast amount of non-AII products, mostly oil and so on, but China is is both their their crutch and our dependency.
▶ 3:02:41So, is it fair to say at the conclusion of this that if we're going to win in AI, we have to wean ourselves off of dependency, while in fact continuing to push forward that it we have to do both if we're going to win the AI battle.
▶ 3:03:01I agree with the sentiment. Yeah. So, if I could put it in the the the simplest terms, one that even a publicly educated kid like me would understand, we are back into a Reagan us or them time. The us is the free world and the them is best known for China and Russia and their immediate allies.
▶ 3:03:23And that in an us or them world as Ronald Reagan when asked about what his strategy was said we win they lose. Is that really where we are again? Exactly where Reagan inherited the Cold War that we have to in fact win this by decoupling and by by causing the rest of the free world to also decouple.
▶ 3:03:49I I think China is already decoupling uh rapidly from us, much faster than we've been able to uh from them.
▶ 3:03:56And I'll and I'll follow up with that. If they decouple before we decouple, will they in fact have leverage with us that we cannot overcome?
▶ 3:04:04That's their explicit strategy, what you just laid out.
▶ 3:04:08Okay. in the 36 seconds left. If we do not provide the energy necessary to have our AI be ahead of their AI, if we do not ensure that the fabrication capability and the other technologies are invested in, do we lose that us or them advantage? one in which China then has the opportunity to deny us the ever getting back to a lead.
▶ 3:04:39That is that is a very real and substantial risk.
▶ 3:04:44And I think Mr. Chairman, you have made this the most important hearing not just of the day or the week but perhaps of this Congress because it it does give us an opportunity to understand exactly what we're dealing with and I want to thank you for holding it and yield back.
▶ 3:04:57Thank you, Mr. Isa. Representative Ma.
▶ 3:05:01Thank you, Mr. Chairman and ranking member. Uh, China's premier makes the claim that China seeks the world where the world can cooperate on AI. And he even argues publicly against AI techno But that's is not true. That's not the game China is playing. For the PRC, the goal has always been AI dominance, capturing the global market and winning the race against the US.
▶ 3:05:29Now PRC is using the full force of its industrial policy to make that a reality. And this matter to and this matters to the defense of our nation. Just last month, Secretary Bissen said it clearly, a golden dome is meaningless if China surpasses us in artificial intelligence. Now, Guam is America's front line in the Pacific and just two time zones away from Beijing.
▶ 3:05:56Losing the AI race has real implications for our island and for a free and safe Indo-Pacific. So, we must take a two-prong approach, I believe, and leading the world in AI while continuing to make investments in the missile defense system. And Chairman Mass understands this threat, which is why he assembled us together and and is putting forth a slate of bills to tackle this problem. And part of tackling this problem is knowing the facts of China's AI ecosystem.
▶ 3:06:26From its mad manufacturing capabilities to its foreign inputs to its AI utilization and compute capacity. Without this that awareness, our policy makers are blindly tackling a Goliath in the dark.
▶ 3:06:41And this is why I introduced China AI Power Report Act, which uh Vidman with Congressman Vidman to create the first ever annual assessment of China's AI power to ensure our export controls are adaptive, targeted, and maintain our technological advantage. Of course, the time to act is now. And so, Mr. Potinger.
▶ 3:07:08The Trump administration was the first to recognize the need for strategy on emergency technologies like quantum computing in 2018. Could you walk us through how China is leveraging its AI industry and other areas like quantum biotechnology and supercomputing? What does that mean for our national security? Sir,
▶ 3:07:32thanks Congressman. I uh Ci Jinping talked about AI in his New Year's address this year. Uh he he understands that this is a fulcrum, right? That this is this is the pivotal technology that allows all these other technologies of the of of the future and the in the near future.
▶ 3:07:52quantum uh computing uh all the all what we're seeing with uh advanced materials that are being invented um new new biotech uh as well as military capabilities. Um he sees this as so important um that he is pulling out all the stops. In fact, while he's been leader, China has now spent more just on semiconductor manufacturing uh so that they can uh be very capable in AI.
▶ 3:08:22They've spent more than four times what Congress uh passed uh for semiconductor manufacturing in the uh chips and science act uh in 2022. Four times their economy is less than twothirds our time and they're spending four times that amount of money.
▶ 3:08:37So um I think that uh all of those technologies you were mentioning quantum actually the the lead I think Cinping is correct in identifying AI as as the spark plug that is going to allow um either US uh or uh or or a communist regime in China and their friends uh to dominate in that
▶ 3:09:01I appreciate it. Uh we got a minute left and can you expand or let me know what's China's access to compute through cloud
▶ 3:09:11Yeah, that's very very important. That's one of the big loopholes that the last administration was uh working to address uh and that I think we there's still a lot of work to be done. uh and that is it does us no good to prevent Beijing from importing massively powerful AI chips, the most advanced chips if they can just go to Malaysia and train their AI and utilize AI in data centers, you know, in in on our shores or in third countries.
▶ 3:09:42So that you we want trusted companies uh and and and partner governments to be the ones that are actually stewards of this uh computing capacity.
▶ 3:09:55Appreciate it. Thank you very much to the panel. Thank you, Mr. Chairman.
▶ 3:09:59Thank you, Representative Fine.
▶ 3:10:02Thank you. Thank you, Mr. Chairman, and thank you for having this hearing today. I've actually been bouncing between here and education where we've been talking about the effects of of AI in education. Um I think this really boils down to two issues. The first is do we not let China get our technology and I think the chairman has a bill that will very effectively deal with that.
▶ 3:10:25But then I think the second part of it is how do we make sure our technology becomes the standard for the world and not Chinese. So there's sort of an offensive and a defensive. I would describe the chairman of defensive. Don't get our stuff an offensive which I've got a bill called the full AI stack export promotion act that would do to try to push our stuff out there to become the global standard. Now Mr.
▶ 3:10:47Pottinger, we saw an aggressive push by China to include AI full stack into their belt and road initiative with the goal of making countries stick to the communist AI ecosystem. Um, my bill that I've talked about would direct the State Department to identify American technologies and promote them to our allies and partners so they stay in the American AI ecosystem.
▶ 3:11:10Can you explain how aggressively you think it is or how important it is that we aggressively and securely promote our AI technologies and how that counters China?
▶ 3:11:18Yep. I'm strongly in in support of American technology dominating uh the full stack in you know most of the world uh not not in in China per se where we're not actually welcome right so uh but when we talk about the tech stack it's important to remember it's not just the hardware the the the Nvidia GPUs and so forth in fact the further the further up the stack you go the more valuable it gets
▶ 3:11:49where Nvidia I mean to to use maybe a bad analogy if Nvidia GPUs are are the rails for the railroad all of the things that that enables in terms of AI applications the data centers the the the the uh incredible innovations that are made possible through creative use of AI that those are the locomotives on the track
▶ 3:12:16I I put it this way the hardware creates the capability, the software creates the creativity. I mean, that's
▶ 3:12:22that's right. And and more more of the value is there. So, I would rather sacrifice uh you know, giving China some railroads uh in service of us making sure that we dominate the the the locomotives and every all the way back to the caboose that should be American companies uh in not just in the United States and competing for for major industrialized economies, but for the whole world, global, south, and in between. So I I have one other question again you're talking about software.
▶ 3:12:51So to use an analogy of sort of social media, China was able to weaponize Tik Tok as a vehicle not only to sort of for we're not talking about military benefit. We're talking a lot here about them using our technology for military but Tik Tok was weaponized as sort of a propaganding and brainwashing um brainwashing exercise.
▶ 3:13:12um if China's stack becomes the global standard, is there the ability for them to kind of use that what comes out of AI to engage in the sort of nefarious activities using AI that they have done um uh than they have done with sort of things like Tik Tok. And I have to let Mr. Feiner answer as well given that he's the better version of me. So uh I'm fine. You're finer. So you you both can answer.
▶ 3:13:39[laughter] I'll start. I I I don't accept the last characterization. We can we can take that one offline. Um uh representative I I think uh honestly the best argument for the importance of the issue that you've put on the table which is the full tech stack including uh software the best argument that that is true and that not only uh do we believe it's true but that the Chinese including their very top leadership believes it's true is that Xiinping himself launched a campaign uh inside China
▶ 3:14:10uh to purge American software uh he called it delete a delete America essentially Um and and you know that that is indicative of the fact that they believe that they have an unhealthy degree of dependency and that they are going to try to do something uh to uh to end that and and to indigenize even this uh additional area of of capability.
▶ 3:14:33Uh so fully agree with you're putting this issue on the table with Matt's uh characterization that uh we have to be talking about the full tech stack not just hardware. Uh and uh I'll leave it at that.
▶ 3:14:49Yeah, I I associate myself with with those
▶ 3:14:53Yeah. Look, what I would say is China sees us as the enemy. It's high time we do the same. So, with that, I yield
▶ 3:15:00Thank you.
▶ 3:15:01Gentleman yields back.
▶ 3:15:03We're going to conclude this hearing. I have a number of thanks to give. I want to start by uh thanking our panelists. Your testimonies were invaluable. So, thank you. I think uh it says a lot the number of members that came here to ask you questions and hear your responses. They valued what it is uh that that you have for experience and what you brought here to say. I want to thank our members for their participation.
▶ 3:15:26I want to thank thank the administration uh because this is something that they are working on that they are rapidly looking at uh both from the department of war to the department of commerce. Uh uh people have seen uh obviously BIS put out rules even as late as last night uh looking to codify as members of Congress what takes place to make sure that anything that's exported uh doesn't rise above thresholds that we're going to have operating here in the United States of America and that we're going to make sure things don't go to end uses
▶ 3:15:56uh for adversaries like China and Russia, Iran. And I think we can chalk Venezuela off the table in part and we're probably pretty close to chalking Iran off the table in part and Cuba's probably close to that list as well. But the administration is paying attention to this issue. Uh and and I thank them for that and I thank your work specifically, Mr. Potinger, your work in this space previously. You helped advance and create that gap for the United States of America with what your work was in the 45 administration. And I thank you for that.
▶ 3:16:26And I want to thank not to diminish anybody else. I want to thank our entrepreneurs in this country number one. Uh our tech entrepreneurs and those companies and those engineers and uh the people working in places from Silicon Valley to Texas to Florida to to every other state and beyond in this space. You've made such capable tech, such a capable stack.
▶ 3:16:52everything that you outlined incredibly well that we have to have a hearing like this because like I opened up with in my opening remarks, when we're talking about chips, it's not just kids that are playing firsterson warfighting video games.
▶ 3:17:09It is affecting real war, real weapons systems, real battles, real decision making and real Those are the some of the stakes. The stakes go well beyond that, but those are just some of the stakes about what is at play in this debate. And so I thank everybody for uh bringing in their expertise. I I also I thank industry for their effort to educate Congress uh over the last year and beyond.
▶ 3:17:40very specific effort by industry to come in behind closed doors, talk to members of Congress about every level of the stack and and what we should be thinking about, concerned about educating people has been a very purposeful effort. Uh in that I thank again the witnesses for your testimony, members for their questions and members of the committee may have some additional questions for you witnesses and we will ask that you respond to these questions in writing and in that this hearing is adjourned.