January 19: This week in AI federal policy
DC/ai Decoded: A weekly newsletter on developments in artificial intelligence and quantum federal policy
This week decoded
The Commerce Department’s Bureau of Industry and Security issued a new rule to permit case‑by‑case exports of certain high‑performance semiconductors to China and Macau under specified national security conditions. At the same time, Commerce announced a semiconductor‑focused trade agreement with Taiwan that aims to “decisively strengthen” U.S. domestic chip manufacturing through Taiwanese investment and preferential tariff treatment tied to expanding U.S. production capacity. In parallel, President Trump issued a Section 232 proclamation finding that current levels of semiconductor and semiconductor‑equipment imports threaten to impair U.S. national security and imposing a 25 percent tariff on certain advanced computing chips while directing broader negotiations to reduce reliance on foreign semiconductor supply chains.
In Congress, Democratic lawmakers continued to focus on the use of AI for nonconsensual sexual images, particularly generated by X Corp’s Grok. The BIS rule received bipartisan backlash.
Read more below
Congress
Hearings
Last week
On January 13, the House Ways and Means Trade Subcommittee held a hearing on Maintaining American Innovation and Technology Leadership.
On January 13, the House Financial Services Digital Assets, Financial Technology, and Artificial Intelligence Subcommittee held a hearing on Delivering for American Consumers: A Review of FinTech Innovations and Regulations.
On January 14, the House Committee on Education and Workforce held the first hearing in a series examining artificial intelligence on Building an AI-Ready America.
On January 14, the House Foreign Affairs Committee held a hearing on Winning the AI Arms Race Against the Chinese Communist Party.
On January 14, the House Science, Space and Technology Research and Technology Subcommittee held a hearing on Assessing America’s AI Action Plan.
This week
On January 21, the House Small Business Rural Development, Energy, and Supply Chains Subcommittee holds a hearing on Empowering Rural America Through Investment in Innovation.
On January 21, the House Foreign Affairs Committee holds a markup of bills including the Artificial Intelligence Oversight of Verified Exports and Restrictions on Weaponizable Advanced Technology to Covered High-Risk Actors (AI OVERWATCH) Act and the China AI Power Report Act.
On January 21, the House Homeland Security Committee holds a hearing on Oversight of the Department of Homeland Security: CISA (Cybersecurity and Infrastructure Security Agency), TSA (Transportation Security Administration), S&T (Science and Technology Directorate).
On January 22, the House Science, Space and Technology Committee will hold a hearing on Assessing U.S. Leadership in Quantum Science and Technology.
Legislation
Reps. Michael Baumgartner (R-WA), Abraham Hamadeh (R-AZ), Maria Elvira Salazar (R-FL), and Mike Ezell (R-MS) introduced a bill to require the Secretary of State to conduct assessments of the risks posed to the United States by foreign adversaries who utilize generative artificial intelligence for malicious activities. (Text)
Resident Commissioner Pablo Jose Hernández (D-PR) and Rep. Ted Lieu (D-CA) introduced the AI in Health Care Efficiency and Study Act to require the Secretary of Health and Human Services to conduct a study on strategies for the application of artificial intelligence technologies that can be used in the health care industry to improve administrative and clerical work and preserve the privacy and security of patient data. (Text)
Sen. Ed Markey (D-MA) and Rep. Summer Lee (D-PA) reintroduced the Eliminating Bias in Algorithmic Systems (BIAS) Act to require federal agencies to establish or strengthen civil rights offices with staff trained in algorithmic accountability and civil rights enforcement, and to regularly report to Congress on how AI systems are impacting vulnerable communities. (Text)
Reps. Mike Levin (D-CA) and Kathy Castor (D-FL) introduced the Stopping Hikes In Electricity from Large Load Demands (SHIELD) Act to update federal utility policy to ensure that massive electricity users bear the costs of the grid infrastructure they require, while incentivizing large energy consumption facilities to power their operations with zero-emission electricity. (Press release)
Sens. Chris Van Hollen (D-MD), Dick Durbin (D-IL), Richard Blumenthal (D-CT), Cory Booker (D-NJ), Tammy Duckworth (D-IL), Tina Smith (D-MN), Peter Welch (D-VT), and Angela Alsobrooks (D-MD) introduced the Power for the People Act to ensure data centers pay for their energy costs and create a system to manage data center interconnection to the grid, mitigate pollution, and create jobs. (Text)
Rep. Abe Hamadeh (R-AZ) introduced the Improving Emerging Tech Opportunities for Veterans Act to add emerging technologies such as artificial intelligence and semi-conductor manufacturing to be eligible for VET-TEC. (Press release)
Reps. Emanuel Cleaver (D-MO) and LaMonica McIver (D-NJ) reintroduced the Workforce of the Future Act to require a detailed study on the impact of artificial intelligence on the economy and workforce and and provide workers, teachers, and students with the resources to develop integral skills required to participate in the workforce of the future. The Senate bill was introduced by Sens. Lisa Blunt Rochester (D-DE), Mazie Hirono (D-HI), and Adam Schiff (D-CA). (Text)
Correspondence
Sens. Todd Young (R-IN), Tom Cotton (R-AR), Mike Lee (R-UT), John Barrasso (R-WY), John Cornyn (R-TX), Jim Risch (R-ID), James Lankford (R-OK), and Jerry Moran (R-KS) sent a letter to Department of Energy Secretary Chris Wright urging action against Chinese foreign nationals accessing our DOE national laboratories and compromising American innovation in artificial intelligence. (Letter)
Reps. Gabe Amo (D-RI) and Gregory Meeks (D-NY) sent a letter to Secretary of Commerce Howard Lutnick to express opposition to President Donald Trump’s decision to loosen export controls and approve the sale of advanced AI chips to China. (Letter)
Trump Administration
Commerce Department
The Bureau of Industry and Security (BIS) at the Department of Commerce issued a rule revising its licensing policy for semiconductor exports to China, changing from a presumption of denial to a case-by-case review of export license applications for the Nvidia H200, AMD MI325X, and similar chips, provided certain security requirements are met. (Federal Register) (Press release)
Commerce announced the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the United States signed a trade deal in which Taiwanese semiconductor and technology enterprises will make new, direct investments to build and expand advanced semiconductor, energy, and artificial intelligence production and innovation capacity in the United States and Taiwan will facilitate U.S. investment in the Taiwanese semiconductor, AI, defense technology, telecommunications, and biotechnology industries. (Fact sheet)
White House
President Donald J. Trump signed a Proclamation invoking Section 232 of the Trade Expansion Act of 1962 directing the Secretary of Commerce and U.S. Trade Representative to jointly negotiate agreements, or continue any current negotiations of agreements, to address the threatened impairment of the national security with respect to imports of semiconductors, semiconductor manufacturing equipment, and their derivative products from any country. The President also imposed a 25% tariff on certain advanced computing chips, such as the NVIDIA H200 and AMD MI325X; the tariff will not apply to chips that are imported to support the buildout of the U.S. technology supply chain and the strengthening of domestic manufacturing capacity for derivatives of semiconductors. (Proclamation)(Fact sheet)
On January 16, First Lady Melania Trump delivered opening remarks at Zoom Ahead: AI for Tomorrow’s Leaders, a national program for K-12 students on artificial intelligence.
National Institute of Standards and Technology (NIST)
On February 11-12, NIST holds a virtual meeting of the Visiting Committee on Advanced Technology to discuss updates on major programs at NIST, strategic priorities, safety, cybersecurity, and work on its initial observations, findings, and recommendations for the 2025 VCAT Annual Report.
Noteworthy Quotes and Events
ADMINISTRATION
White House
President Donald Trump posted “Under Sleepy Joe Biden and the Radical Left Democrats, the average American Household’s monthly Utility bills went up MASSIVELY – over 30%! I never want Americans to pay higher Electricity bills because of Data Centers. Therefore, my Administration is working with major American Technology Companies to secure their commitment to the American People, and we will have much to announce in the coming weeks., First up is Microsoft, who my team has been working with, and which will make major changes beginning this week to ensure that Americans don’t ‘pick up the tab’ for their POWER consumption, in the form of paying higher Utility bills. We are the “HOTTEST” Country in the World, and Number One in AI. Data Centers are key to that boom, and keeping Americans FREE and SECURE but, the big Technology Companies who build them must ‘pay their own way.’ Thank you, and congratulations to Microsoft. More to come soon! President DJT”
White House AI & Crypto Czar David Sacks posted “Narrative violation: according to Blackrock, the U.S. does not have enough workers to meet surging demand for the construction boom. AI is creating too many jobs!”
Sacks also posted “Narrative violation: A new paper from Stanford this week finds that ‘AI substantially reduces wage inequality while raising average wages by 21 percent.’”
Sacks also posted “Narrative violation: The largest AI data center uses roughly the same amount of water as two burger joints. There are over 200,000 fast food restaurants in the U.S. so this is a tiny amount.”
Commerce Department
Commerce Secretary Howard Lutnick said, “There’s two commitments from Taiwan: there’s $250B that comes directly from companies, and then, there’s $250B supplied by the government... we’re going to bring it all over so we become self-sufficient in the capacity of building semiconductors.”
U.S. Commerce Dept. posted “Initially, Micron committed $75B to build semiconductors in America. Under President Trump’s leadership, that investment has grown to $200B. Companies are seeing the value of investing in American innovation, American power, and the American economy. President Trump’s America First Agenda is delivering—bringing jobs, manufacturing, and research back to America.”
U.S. Commerce Dept. also posted “Secretary Lutnick on the historic semiconductor agreement: ‘Yesterday, we announced the Taiwan deal, which allows Taiwan to invest $500 billion in America to bring semiconductor manufacturing here. One of the key drivers of this investment is that Micron currently produces its memory—the best memory in the world—in Southeast Asia, and we want it made here. That’s where the tariff model comes in: it starts with chips and uses tariffs to drive manufacturing back to the United States.’”
U.S. Commerce Dept. also posted “Secretary Lutnick is confident America will lead in semiconductor manufacturing after the historic Taiwan deal: ‘We’re going to have hundreds of companies coming here. We’re going to build giant semiconductor industrial parks in America, and we are going to bring semiconductors home.’”
Federal Reserve
In remarks on the Outlook for the Economy and Monetary Policy, Vice Chair for Supervision Michelle Bowman said, “Economic activity seems to have been supported by a surge in equity prices and investment activity related to artificial intelligence (AI). Although stock market valuations may appear stretched, expected earnings growth for AI-related companies has been high, and, so far, a substantial part of the investment has been self-financed. I am concerned that disappointing news on AI investment returns could lead to a sharp correction in equity prices, but the economy continues to show elevated productivity growth likely due, in part, to increased adoption of AI technologies.” (Remarks)
CONGRESS
BIS Rule
Sen. Elizabeth Warren (D-MA) issued a statement in response to the Bureau of Industry and Security (BIS) rule on advanced AI chips, saying, “This is a good step by the Bureau of Industry and Security (BIS) to require companies like NVIDIA to prioritize U.S. customers. This policy was core to the Guaranteeing Access and Innovation for National Artificial Intelligence (GAIN AI) Act, which Senator Banks and I introduced last year but unfortunately was stripped from last year’s National Defense Authorization Act because of David Sacks. This Committee will be watching implementation of this regulation closely. If BIS implements its regulation in good faith, it will not approve a single license for NVIDIA to sell H200s to China. Demand for AI chips in the United States far outstrips supply, and we should not let companies like NVIDIA sell to Chinese tech giants as U.S. companies, startups, and universities wait in line. I will keep working with my colleagues to pass bipartisan legislation like the GAIN AI Act and the SAFE Chips Act.” (Press release)
Warren posted “American companies like Nvidia should prioritize U.S. customers over Chinese tech giants - this policy was core to my GAIN AI Act with SenatorBanks. If the Trump Admin implements this rule in good faith, it will not approve a single H200 license to China. I will be watching.”
Rep. Brian Mast (R-FL) posted “I believe America must win the AI Race against China. Jensen Huang, you think ‘China is going to win the AI Race.’ We’re not the same. I don’t believe in betting against America, but clearly you do.”
Mast also posted “Jensen Huang, since you’re not on X, I’ll tag your company
nvidia. You and your paid minions are fighting to sell millions of advanced AI chips to Chinese military companies like Alibaba and Tencent. I’m trying to stop that from happening. Jensen, if you ever feel like debating the actual facts, I’ll meet you anytime, anywhere. I’m sure any FoxNews show would love to air it tonight! And every so-called MAGA influencer being paid to push this garbage should be embarrassed. You all copied NVIDIA talking points so much that you all made the same spelling error! But worse, you’re siding with a woke DEI company with transgender bathrooms, and by the way, is the biggest financial supporter of Ilhan Omar. Pathetic. To all you influencers. Put it on the record if I got it wrong! Do you agree with me in advising we should not sell MILLIONS of advanced AI chips to China or Jensen, who wants to sell his very best to the commies?”
House China Committee Chair John Moolenaar (R-MI) said that China is “in this to win it at all cost. They will continue to access our technology and, at the same time, be working to build upon that to learn what they can until they can force us out of business. The world is either going to be more in the direction of China and its values, or continue on the road of America and freedom-loving countries’ values.” (Punchbowl)
Taiwan Trade Deal
Sen. Pete Ricketts (R-NE) posted “Historic step forward. This Taiwan trade deal brings chip manufacturing home, secures our supply chains, and helps ensure America wins the AI race! Now, Congress needs to finish the job by ending double taxation and unlocking critical investment.”
House Foreign Affairs Committee Majority posted “Strong economic ties between the United States and Taiwan are key to winning the AI Arms Race. President Trump is strengthening those ties and driving unprecedented investment in the United States. That’s the definition of America First.”
Senate Republicans posted “Advanced chips are vital for our military strength and our technology industry. This trade deal will strengthen the American chip industry, and help America beat China in the AI race.”
Grok and Nonconsensual Sexual Images
Sen. Dick Durbin (D-IL) posted “BIG NEWS: This is the moment the Senate passed my bill to combat nonconsensual, sexually-explicit deepfakes. Grok is out of control. AI can’t be unregulated. I teamed up with RepAOC to stand up for victims who’ve had their autonomy taken from them by AI. Let’s get it done.”
Rep. Suzanne Bonamici (D-OR) posted “AI leadership requires more than deploying technology; it means preparing people to use criticalthinking skills to recognize benefits and avoid risks. I’m developing a comprehensive, human-centered framework so AI can enhance opportunities, not widen gaps.”
Science Committee Democrats posted “Trump’s hand-picked climate deniers are using Grok to inform the National Climate Assessment—the same AI program that has been churning out thousands of nonconsensual sexualized photos of women and children. Our research standards must be higher.”
Science Committee Democrats also posted, “’President Trump is sending American taxpayer dollars to xAI through a deal made in September,’ said RepZoeLofgren. ‘Essentially, we’re paying Elon Musk to give perverts access to a child pornography machine.’”
Sen. Chris Coons (D-DE) posted “Elon Musk was the largest donor to Trump’s campaign. Now, Trump’s Pentagon is embracing Musk’s chatbot that generates sexual deepfakes of people, including children. If this administration won’t do anything to protect kids, Congress must step up.”
Sen. Amy Klobuchar (D-MN) posted “Voters from across the political spectrum know we need rules of the road for AI to protect consumers and families and keep kids safe online.”
Rep. Emanuel Cleaver (D-MO) posted “It is extraordinarily disturbing that Elon Musk and X are allowing users to post non-consensual sexualized AI images on their platform. It is beyond disgraceful—it’s dangerous. If they will not take action to stop it, then Congress must.”
Rep. Frank Pallone (D-NJ) posted “Grok is churning out sexualized images of women and children while Trump and Republicans are trying to block states from regulating AI. Elon Musk is ‘addressing’ this by charging users to create these exploitative images, which doesn’t stop the exploitation at all. What we need is comprehensive guardrails and privacy protections to ensure these platforms aren’t able to freely produce these images.”
Legislation
Rep. Suzanne Bonamici (D-OR) issued a statement on her upcoming legislation to create a comprehensive framework to improve AI education and workforce readiness, including saying, “My framework reflects a simple principle: AI policy should prepare people, not just deploy technology. By focusing on coordination, readiness, protections, and evidence, it lays the groundwork for responsible innovation that strengthens education, supports workers, and sustains American leadership in an AI-enabled economy…. My framework establishes a coordinated federal approach to align AI policy with education and workforce readiness. It looks beyond the tech industry alone to support economic sectors affected and disrupted by AI. It affirms the boundaries that restrict federally-directed curriculum and directs agencies to coordinate to support students, educators, and workers, rather than leaving institutions to navigate conflicting signals or fend for themselves. Coordination strengthens innovation by creating clarity, consistency, and accountability in digital learning and workforce policy.” (Press release)
Sen. Tom Cotton (R-AR) posted “As President Trump said, American AI dominance can’t mean higher energy prices. My DATA Act will keep prices low for Arkansans while still encouraging investment in cutting-edge technology.”
Cotton also posted “My DATA Act will balance keeping electricity prices affordable for Arkansans and making sure that we maintain our lead in the AI race.”
Rep. Mike Levin (D-CA) posted “Families shouldn’t have to pay higher electricity bills because massive data centers aren’t paying their fair share. That’s why I introduced legislation with USRepKCastor to protect families and small businesses from rising energy costs driven by the explosive growth of data centers and to make sure everyday Americans aren’t subsidizing data centers’ electricity.”
Rep. Kathy Castor (D-FL) posted “Household electric bills are WAY up often driven by the energy needed for AI and data centers. That’s why RepMikeLevin and I are fighting for hardworking American families to protect them from higher electric bills.”
Rep. Summer Lee (D-PA) posted “I represent Pittsburgh and Western Pennsylvania, a region that reflects both our industrial past and the technologies shaping our future. As a growing hub for innovation in Artificial Intelligence, we have a responsibility to make sure AI does not deepen the inequities Black, brown, low-income, and other vulnerable communities already face. The Eliminating BIAS Act puts real guardrails and infrastructure in place to ensure transparency, accountability, and civil rights protections, especially in an age of rampant disinformation and misinformation. I’m proud to partner with SenMarkey
to ensure innovation never comes at the cost of our civil rights or human dignity.”
Rep. Mike Kennedy (R-UT) posted “We cannot risk ceding the future of AI to China. In housescience I discussed how my GENESIS Act advances the WhiteHouse’s AI Action Plan and how the federal government should empower state-level experimentation. Utah’s regulatory sandbox has already proven this model works, and I’m committed to building on that success so we win the AI race.”
Rep. Mike Lawler (R-NY) posted “Our export control laws are in place for a reason: to protect sensitive technology from falling into the hands of bad actors. My Remote Access Security Act closes a loophole in U.S. export control law that has allowed CCP-aligned companies to access restricted American technology through cloud services. Proud to see this measure pass the House floor tonight!”
About Lawler’s bill, House Foreign Affairs Committee posted “Proud to see the overwhelming support for this bill. We cannot allow China to exploit export control loopholes to gain the upper hand in AI. This is how we maintain American dominance and win the AI Arms Race.”
Sen. Todd Young (R-IN) posted “AI is for small businesses too. I want to help our Hoosier small businesses to have access to guidance and training on any AI tools they need to compete in today’s evolving digital economy.”
Rep. Rob Menendez (D-NJ) posted “Your electric bills are rising... and AI data centers are a major reason why. While AI innovation is promising, we must ensure it’s not happening at the expense of our communities. That’s why we’re taking action to fix the system, so these data centers - not our families - are accountable for their costs.”
Miscellaneous
Rep. Ted Lieu (D-CA) posted “The White House policy on AI: -Suppress federal bills on AI -Suppress states from regulating AI -Sell advanced AI chips to China This has led the tech industry down the wrong path with increasing backlash. They should ask their large language models for a better approach.”
Sen. Marsha Blackburn (R-TN) posted “Thrilled to work with realDonaldTrump to establish one rulebook for AI that protects children, creators, conservatives, and communities. This is the solution America needs to safeguard Americans while unleashing AI innovation”
Sen. Todd Young (R-IN) posted “Chinese nationals currently have access to America’s national laboratories. We must protect U.S. innovation in AI. I joined with SenTomCotton, SenMikeLee, and GOP colleagues in urging ENERGY to protect American innovation and ban Chinese nationals from U.S. labs.”
Sen. John Cornyn (R-TX) posted “The Genesis Mission was started to ensure the U.S. dominates the AI race, but we know that adversaries like China are actively working to steal these cutting-edge technologies. I joined SenTomCotton & SenMikeLee in a letter to SecretaryWright ENERGY urging him to bar Chinese foreign nationals from working at national laboratories where they can compromise the Genesis Mission.”
Cornyn also posted “AI is transforming the pharma industry for the better”
Rep. Suzan DelBene (D-WA) posted “Private companies’ AI shouldn’t decide whether seniors get care. I’m pushing to stop new Medicare red tape that will delay treatment. Medicare providers should be able to deliver care when it’s needed.”
House Science Committee posted “’But with his Golden Age vision of scientific rigor and technological progress, President Trump has restored a spirit of confidence to our innovation enterprise. We are approaching AI not with fear, but with responsible boldness.’ - WHOSTP47 Director mkratsios47“
House Science Committee also posted “’As my office coordinates the administration’s implementation of the AI Action Plan, I see many opportunities for collaboration with this committee and the Congress.’ - WHOSTP47 Director mkratsios47”
House Science Committee also posted “’I am particularly excited about the innovative potential of the Genesis Mission and AI for science. With the signing of that executive order, President Trump has mobilized the largest federal scientific effort since the Apollo Program.’ - @WHOSTP47 Director @mkratsios47”
Rep. Rich McCormick (R-GA) posted “McCormick Minute: AI Week on the Hill. AI is the defining technology of this century, and the U.S. must stay at the forefront of the race. I’ve had the pleasure of working with global leaders and CEOs on AI policy. We are just getting started on legislating this technology to improve the lives of Americans.”
Rep. Russell Fry (R-SC) posted “AI growth shouldn’t mean higher power bills for families. POTUS is leading the way, and it’s good to see Microsoft stepping up to protect American consumers while keeping the U.S. #1 in innovation.”
Rep. Greg Casar (D-TX) posted “It should be illegal for companies to use AI to jack up your prices based on your personal data. Congress should pass my bill to ban surveillance pricing — before it becomes an even bigger problem.”
Sen. Richard Blumenthal (D-CT) posted “Big Tech is making your electrical bills skyrocket. I’ve been demanding the White House’s plan to deal with energy prices & data centers for months—instead he’s palled around with Mark Zuckerberg & the AI elite. Talk from Trump is cheap. I’ll be introducing strong legislation to combat skyrocketing prices from data centers. If Trump is serious about this AI-driven drain on family’s pocketbooks, he will endorse my bill & make sure it becomes law.”
What I’m Reading This Week
From Troll Memes to Policy Messaging: How Donald Trump Turned AI Deepfakes into a New Tool of Political Power, Money Control.
Global Risks Report 2026, World Economic Forum.
How 2026 Could Decide the Future of Artificial Intelligence, Chris McGuire, Kat Duffy, Vinh Nguyen, Michael C. Horowitz, Adam Segal, and Jessica Brandt, Council on Foreign Relations.
About Zero One Strategies
Zero One Strategies is a specialized government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.
The practice focuses on key areas such as artificial intelligence, digital assets, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.
Contact us at Stacey@ZeroOneStrategies.com
