Digital Liberty Op-Ed in RealClearMarkets: “Why the GAIN Act Is a Net Loss for U.S. Technology” 

By Rohan Naval

On November 11, 2025, RealClearMarkets published an op-ed by Digital Liberty’s Executive Director James Erwin.

The op-ed explains how the GAIN AI Act, currently under consideration by the House of Representatives,  will hurt American competitiveness in chip manufacturing.

The bill gives American consumers the “right of first refusal” for any advanced chip before it is exported to a foreign country. While proponents of the bill are selling this as a means to keep advanced technology out of the hands of the CCP, this hurts the global standing of American chip manufacturers more than anything else.

This may seem a good idea on the surface: a measure to prevent our main adversary from buying up our stock at the expense of American companies. But like all attempts to micromanage the market, the GAIN AI Act will cause harmful distortions while failing on its own terms. As the House considers its own defense bill, they should keep this provision out.

If the U.S. is to get the world building AI on American chips, as President Trump and AI czar David Sacks have challenged us to, restricting our companies’ market access is the opposite of what we should do.

Lawmakers have correctly identified that America must beat the CCP in the AI race; this is an imperative to ensure that artificial intelligence is pro-freedom and pro-America. However, measures such as the GAIN AI Act are entirely counterproductive to these aims. Limiting the market share of American chipmakers will  prevent them from turning a profit that can be reinvested in innovation, and it will hurt Americans more than it does the CCP.

There are two counterproductive effects of export controls, even half-hearted restrictions like GAIN AI. First is the obvious contradiction that dominating the global chip market requires American chipmakers to export their products around the world. We can either prioritize keeping our technology out of China’s hands or we can prioritize dominating the global tech stack. What we cannot do is get the world to buy American chips by prohibiting the world from buying American chips.

On this strategic question, Trump and Sacks are correct while Banks and Moolenaar are wrong. Even if policymakers were to choose the former course, prioritizing keeping our technology out of reach of the CCP, it is impossible to do so for long. Short of keeping U.S. chip producers from selling them at all, they’ll eventually reach those whom American politicians would prefer they not.

The GAIN AI Act is a full reversal of the policies that made American chip manufacturers successful. The bill would emulate the Chinese model, with a planned economy and government fiat superseding the expertise of innovators in the field. Congress needs to embrace the American economic model, which puts innovators in the driver’s seat and will put America in first place.

Read the full op-ed here.