AI OVERWATCH Act
Sponsored By: Senator Banks, Jim [R-IN]
Introduced
Summary
This bill would create a tight, license-based export control on high-performance and security-sensitive integrated circuits. It targets specific covered and restricted chips by technical thresholds and ties export approvals to detailed national security and AI leadership reviews, plus a new American AI Victory Strategy.
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- Countries of concern: Exports, reexports, or in-country transfers of covered or restricted integrated circuits to entities tied to designated countries would require a license and general licenses would be barred. Existing licenses for those destinations would be terminated and some new license applications must be denied for at least 14 days while approvals must wait at least 30 days after Congress receives required certifications.
- Trusted U.S. persons and companies: A safe-harbor exemption would let vetted U.S. persons export certain chips if they retain ownership and control and the chips are not destined for Macau, Hong Kong, or specified jurisdictions. The exemption framework includes security standards, know-your-customer checks, a foreign ownership cap of 10 percent, a bias toward U.S. manufacturing, and annual audits.
- Oversight and strategy: The Commerce Department would have to provide Congress detailed technical classifications, end-user assurances, and analytic certifications before approving certain licenses. The bill also requires an American AI Victory Strategy with policy recommendations and assessments of rival chip capabilities for fiscal years 2026 and 2027.
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Bill Overview
Analyzed Economic Effects
5 provisions identified: 1 benefits, 2 costs, 2 mixed.
American AI strategy report to Congress
If enacted, the Secretary of Commerce, with covered agencies and the Director of National Intelligence, would send Congress an "American Artificial Intelligence Victory Strategy." The report would assess national security and economic risks if China gains AI leadership and include production numbers and capability assessments for covered integrated circuits for fiscal years 2026 and 2027. Sending the strategy would also trigger timing in the bill, such as ending the temporary licensing pause 14 days after Congress receives it and starting the 24‑month wait before Commerce can change technical chip thresholds.
Which countries trigger chip limits
If enacted, the bill would define "country of concern" to include the People’s Republic of China (including Hong Kong and Macau), Cuba, Iran, North Korea, and Russia. It would also include any Country Group D:5 jurisdiction listed on January 1, 2026. The Secretary of State could add other countries by notice in the Federal Register. This list would be used to decide which exports and transfers need licenses or are prohibited.
New export limits for chip exporters
If enacted, exports, reexports, and in‑country transfers of covered or restricted integrated circuits to a listed country of concern would require a Commerce license. Commerce would send each such application and detailed certifications to Congress at least 30 days before approval. From July 10 through September 7 each year, that review period would be 60 days instead of 30. Commerce would deny all licenses for restricted integrated circuits to countries of concern, temporarily deny covered‑circuit licenses within one business day of application, and keep denials until 14 days after Congress receives the American AI Victory Strategy. Any licenses already issued for such exports to a country of concern would end when the bill is enacted.
Trusted U.S. company export pathway
If enacted, Commerce would set rules within 90 days to designate "trusted United States persons" that can get limited export exemptions for certain covered integrated circuits. Designated firms would need strong physical and cybersecurity controls, KYC checks, annual audits, a preference for U.S. sourcing, and an ownership cap so no more than 10% is held by entities mainly resident in a country of concern. The exemption would not apply if the circuit is headed to Macau, Hong Kong, or a Country Group D:5 jurisdiction, and the circuit must remain under the trusted firm's ownership and control once in operation.
Which chips are covered and restricted
If enacted, the bill would define "covered integrated circuits" by specific Export Control Classification Numbers and by performance thresholds. It would create a higher‑performance group called "restricted integrated circuits," including chips meeting stated processing thresholds (for example, a total processing performance threshold noted in the bill). Commerce could add or change these technical thresholds, but only starting 24 months after the American AI Victory Strategy is sent to Congress. Commerce would have to consult Congress at least 30 days first and show the change would not harm U.S. national security.
Sponsors & CoSponsors
Sponsor
Banks, Jim [R-IN]
IN • R
Cosponsors
Sen. Warren, Elizabeth [D-MA]
MA • D
Sponsored 4/30/2026
Sen. Cotton, Tom [R-AR]
AR • R
Sponsored 4/30/2026
Sen. Shaheen, Jeanne [D-NH]
NH • D
Sponsored 4/30/2026
Sen. Ricketts, Pete [R-NE]
NE • R
Sponsored 4/30/2026
Sen. Cortez Masto, Catherine [D-NV]
NV • D
Sponsored 4/30/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov