U.S. Senate Committee on Banking, Housing and Urban Affairs ranking member calls for markup of AI chip export legislation

The U.S. Senate Committee on Banking, Housing and Urban Affairs published Ranking Member Elizabeth Warren’s opening statement and witness exchange from a hearing on artificial intelligence risks. Warren urged the committee to mark up bipartisan legislation this month aimed at restricting China’s access to advanced AI chips, while also warning that debt-financed AI infrastructure investment could create financial stability risks if the sector turns down. The legislation discussed includes the AI Overwatch Act, which would ban exports of advanced AI chips to China; the MATCH Act, which would seek to prevent China from obtaining equipment needed to manufacture advanced chips; and the Chip Security Act, which would enable tracking of smuggled AI chips. Warren cited federal prosecutors’ allegations that billions of dollars of chips and servers have been unlawfully diverted to China, and former National Security Council official David Feith told the hearing that such chips could support China’s military, domestic repression and commercial competition with U.S. cloud exports. Warren also focused on AI financing, saying companies are on track to spend USD 7 trillion on AI infrastructure by 2030 and are borrowing upwards of USD 1 trillion for data centers, chips and related infrastructure. She warned that exposures running through private credit funds and banks could transmit losses across the financial system if AI companies cannot service their debt, and questioned witnesses on whether taxpayers should support any bailout of AI companies if those investments fail.