A new bill titled the "Decoupling America’s Artificial Intelligence Capabilities from China Act of 2025" has been introduced in the U.S. Senate, seeking to prohibit U.S. individuals and entities from advancing artificial intelligence (AI) capabilities within the People’s Republic of China.

The legislation, introduced by Senator Josh Hawley, aims to restrict China’s access to American AI technology and limit financial investments in Chinese AI research, citing national security concerns.

Key Provisions of the Bill

According to the proposed legislation, U.S. entities—including companies, institutions, and individuals—would be banned from:

• Importing AI-related technology or intellectual property from China.
• Exporting or transferring AI innovations to China or Chinese entities.
• Engaging in AI research or development within China, for a Chinese entity, or in collaboration with Chinese researchers.
• Holding financial interests in or providing funding to Chinese AI companies, especially those tied to China’s military or surveillance programs.

The bill defines "Chinese entities of concern" as organizations, companies, and research institutions affiliated with the Chinese Communist Party (CCP), the People's Liberation Army (PLA), or entities supporting China's military-civil fusion strategy—a policy that integrates civilian technological advancements into military applications.

Additionally, the bill bans U.S. persons from directly or indirectly investing in AI companies operating in China, lending money, or extending credit to such firms. Violators of these provisions would face severe legal consequences, including fines, loss of federal contracts, and restrictions on receiving U.S. financial assistance.

Strict Enforcement and Penalties

To enforce the legislation, the bill mandates that the Secretary of Commerce issue new regulations within 90 days of its enactment. It also empowers the Attorney General, Department of Defense, the Director of National Intelligence, and the FBI to monitor compliance and penalize violators. Under the proposed law, violators would face both criminal and civil penalties, including:

• Corporations: Fines up to $100 million and revocation of federal contracts.
• Individuals (including corporate officers): Fines up to $1 million and ineligibility for federal benefits.
• Entities found guilty of violations: Banned from receiving U.S. government grants, loans, and contracts for five years.
• Immigration consequences: AI-related offenses could lead to visa restrictions or affect citizenship applications for non-U.S. nationals involved in prohibited activities.

National Security and Economic Concerns

The bill reflects growing concerns in Washington over China’s rapid advancements in AI and its use in military and surveillance operations.

U.S. lawmakers argue that China has been leveraging American technology and research partnerships to enhance its AI capabilities, posing a threat to national security. Senator Hawley, the bill’s sponsor, emphasized the urgency of countering China’s AI ambitions. “The Chinese Communist Party is actively using AI to bolster its military and expand its surveillance state. The United States should not be aiding their efforts in any way,” he stated.

The legislation aligns with broader U.S. efforts to decouple technological ties with China, following recent restrictions on semiconductor exports and AI chip sales to Chinese firms.

Potential Impact on Businesses and Research

While the bill is aimed at safeguarding U.S. technology, critics warn that its broad restrictions could disrupt international AI collaborations and harm American businesses. Some technology companies and academic institutions argue that limiting AI research partnerships with Chinese entities may slow global innovation and reduce economic opportunities for U.S. firms.

Additionally, industry leaders have expressed concerns about the practical enforcement of the bill, as AI research often involves open-source collaborations and multinational teams. Some experts believe that China may still find ways to access advanced AI technologies through indirect channels, third-party countries, or domestic innovation.

Next Steps in Congress

The bill has been referred to the Senate Committee on Commerce, Science, and Transportation, where it will undergo further review and potential amendments. If passed, it would mark one of the most significant legislative measures to limit U.S.-China AI cooperation, reinforcing the growing technological and economic rivalry between the two superpowers.