Two of the lawmakers behind the landmark GENIUS Act are now turning their attention to artificial intelligence. Senators Tim Scott and Bill Hagerty have introduced new legislation designed to prevent China and other foreign adversaries from accessing advanced American AI technology through cloud computing services and other digital infrastructure. The proposal would significantly expand the U.S. government’s authority to monitor, restrict, and block foreign access to cutting-edge AI systems that lawmakers believe could threaten national security.
The legislation reflects growing concern in Washington that existing export controls on advanced AI chips are no longer enough. While the U.S. has imposed restrictions on exporting high-performance semiconductors, foreign organizations can still access many of the same AI capabilities remotely through American cloud providers. The new bill seeks to close that loophole by extending national security protections beyond physical hardware and into AI services themselves.
Closing the AI Cloud Loophole
Current U.S. export controls largely focus on preventing advanced semiconductor chips from being shipped to countries considered national security risks.
However, lawmakers argue that foreign governments and organizations can bypass many of those restrictions by renting computing power from U.S.-based cloud providers to train or operate advanced artificial intelligence models.
The proposed legislation would give federal agencies broader authority to monitor AI-related cloud services and prevent access by entities linked to foreign adversaries. Supporters say the goal is to ensure that America’s most advanced AI capabilities cannot be leveraged to strengthen foreign military, surveillance, or cyber operations.
The Lawmakers Behind the Proposal
The bill is being led by Senator Tim Scott of South Carolina and Senator Bill Hagerty of Tennessee.
Both lawmakers played key roles in advancing the GENIUS Act, one of the most significant stablecoin regulatory frameworks passed by Congress. Their latest proposal demonstrates how lawmakers are increasingly treating artificial intelligence and digital assets as interconnected components of America’s broader technology strategy.
Rather than focusing solely on commercial competition, the legislation frames AI leadership as a matter of national security and geopolitical influence.
AI Becomes a National Security Priority
The proposal arrives amid intensifying global competition in artificial intelligence.
Governments around the world are investing billions of dollars into AI infrastructure, semiconductor manufacturing, robotics, defense technologies, and cloud computing. U.S. officials have repeatedly warned that unrestricted access to advanced AI models could accelerate foreign military modernization, cyber warfare capabilities, and intelligence gathering.
The legislation seeks to ensure that American innovation remains protected as AI becomes one of the world’s most strategically important technologies.
Crypto and AI Policy Continue to Converge
Although the bill primarily targets artificial intelligence, it also reflects the increasingly close relationship between AI policy and blockchain regulation.
Many of the same lawmakers who recently focused on stablecoin legislation, digital asset market structure, and blockchain innovation are now expanding their efforts into AI governance. Both industries rely heavily on cloud infrastructure, advanced computing, and secure digital networks, making them central to America’s future technological competitiveness.
As Congress develops new frameworks for emerging technologies, AI and crypto are becoming increasingly intertwined in broader discussions about economic leadership, cybersecurity, and digital sovereignty.
Technology Competition With China Intensifies
The legislation is part of a broader U.S. strategy aimed at limiting China’s access to advanced technologies.
Over the past several years, Washington has introduced restrictions covering:
Advanced AI semiconductors
High-performance computing hardware
Quantum computing technologies
Semiconductor manufacturing equipment
Sensitive cloud computing infrastructure
The new proposal expands that strategy by recognizing that access to AI services can be just as valuable as access to the hardware itself.
Industry Could Face New Compliance Requirements
If enacted, the legislation could require U.S. cloud providers and AI companies to implement additional customer screening, monitoring, and reporting procedures before granting access to advanced AI systems.
Technology firms may be required to verify customer identities, monitor high-risk computing activity, and deny services to organizations connected to sanctioned countries or foreign adversaries.
While supporters argue these safeguards are necessary to protect national security, critics may raise concerns about compliance costs, implementation challenges, and potential impacts on international AI collaboration.
