New GAIN AI Act Mandates 'Right of First Refusal' for U.S. Companies on Advanced Chip Exports

The Guaranteeing Access and Innovation for National Artificial Intelligence Act of 2025, or the GAIN AI Act, is fundamentally about putting a fence around America’s most advanced computer chips. Specifically, it targets the export of high-performance integrated circuits—the kind of chips needed for cutting-edge AI and data centers—to entities in countries the U.S. considers a security risk (like those on the D:5 or E country groups, which include China, Hong Kong, and Macau). If you make or sell these advanced circuits, you’re looking at a major new layer of mandatory licensing and compliance.

The Chip Priority Line: What the Right of First Refusal Means

If a U.S. company wants to sell a covered advanced circuit to an entity in a country of concern, they can’t just ship it. First, they have to get a license from the Commerce Department. The big new hurdle? They must certify that they offered a “Right of First Refusal” to American customers. Think of it like this: before you sell that high-demand item internationally, you have to post a notice for at least 15 days giving U.S. buyers a chance to jump in and buy it first under the same terms. This provision is designed to ensure that if a chip is available, it goes to an American buyer over a foreign buyer in a rival nation. For U.S. companies that rely on securing these top-tier chips—whether they’re running a massive cloud service or building specialized AI hardware—this could be a significant win, guaranteeing them priority access to critical hardware.

The Bureaucratic Burden and the “Trusted” Loophole

This new system introduces serious administrative friction for exporters. The Commerce Department must deny any license application that doesn’t include the certification of the right of first refusal, adding significant time and complexity to transactions. The bill also forces the Commerce Under Secretary to issue detailed regulations within 120 days defining exactly how this public notice and right of first refusal process works, including penalties for misrepresentation. However, there is a major carve-out: exports to countries not of concern are exempt from the license requirement if the product remains under the ownership and control of a “trusted United States person” once operational. To qualify as “trusted,” a U.S. person must meet strict security and auditing standards, and crucially, their ultimate beneficial ownership can’t be more than 10 percent held by any entity primarily based in a country of concern. This creates a regulatory fast lane for specific, secure U.S. entities, but it also gives the Commerce Department vast power to define who is “trusted” and who isn’t.

The Fine Print on Technical Power

The bill gets very technical about what chips are covered, using specific performance thresholds like “Total processing performance of 4,800 or more” and metrics like performance density. If your work involves designing or purchasing these cutting-edge components, the bill’s detailed definitions (tied to specific Export Control Classification Numbers) are mandatory reading. The most interesting detail here is that the Under Secretary of Commerce gets the authority to update these technical parameters after 24 months, meaning the scope of what chips are controlled could expand or contract without needing new legislation. This delegation of power grants the executive branch significant, ongoing control over the definition of critical technology, which can change rapidly in the AI space. In short, the GAIN AI Act is a clear signal that the U.S. is prioritizing domestic access to critical AI technology, but it comes with a heavy dose of new regulatory compliance for the companies that make and sell it.