Technology has become the central arena of geopolitical competition. In this new landscape, market access and innovation capacity are no longer just commercial metrics. They are the primary instruments of national power. Yet, in a rush to secure American dominance, some in Washington are pushing legislation that threatens to dismantle the very engine of U.S. strength.
The proposed AI Overwatch Act would grant Congress veto power over AI export licenses. The goal is understandable. It makes sense not to provide adversarial powers with America’s latest technologies. However, by injecting additional legislative gridlock into already complex export controls, this bill could permanently damage U.S. competitiveness and accelerate the very geopolitical outcomes it seeks to prevent.
To understand why this legislation is dangerous, policymakers must accept a hard truth about the modern defense industrial base: global scale is not optional.
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Advanced AI and semiconductor firms cannot be sustained by the U.S. market alone. An analysis of SEC filings reveals that roughly two-thirds of revenue for leading American chipmakers, including AMD, Broadcom, Intel, Nvidia, Qualcomm, and Texas Instruments, comes from outside the United States. For giants such as Broadcom, Intel, and Qualcomm, reliance on global markets accounts for 75% or more of their revenue.
This is not merely a matter of corporate profits. It is a matter of national security. That global revenue is the only thing funding the staggering cost of next-generation research and development.
Consider the scale of private-sector investment compared to government spending.
In 2025 alone, Nvidia allocated more than $12 billion to research and development. To put that figure in perspective, NASA’s budget request for space operations, including the International Space Station and commercial low Earth orbit development, is estimated to be less than $4.5 billion for 2026.
Cutting off access to international markets triggers a predictable chain reaction. If U.S. companies lose the scale needed to justify these massive investments, they will be forced to pull back on the spending that drives technological leadership. The result is a gradual erosion of U.S. capability, not because American firms were out-innovated, but because policy choices compelled them to retreat.
Furthermore, restrictive bans often achieve the opposite of their intent: They strengthen rivals rather than weaken them.
While U.S. chips currently maintain a slight performance edge over Huawei’s best alternatives, export control policies must be evaluated against the entire AI technology stack. A ban focused narrowly on the chip layer risks ceding a vital global market and losing the revenue needed to fund next-generation research and development, without fundamentally slowing China’s overall AI progress. Indeed, when the U.S. sharply restricted AI exports previously, Beijing responded by standing firm on domestic alternatives. Chinese regulators have strongly discouraged purchases of foreign chips, signaling a political preference for domestic champions.
By adding a congressional veto, Washington risks doing Beijing’s work for it. American policy effectively helps China accelerate its own industrial strategy.
Perhaps the most understated risk of the AI Overwatch Act is the signal it sends to our allies. Just as the U.S. military would never rely on Chinese technology for sensitive systems, other nations might be increasingly reluctant to anchor their digital infrastructure to a supplier that may cut them off later. The more strings Washington attaches, and the more uncertain the export process becomes, the more attractive non-U.S. alternatives appear.
If Congress inserts itself into day-to-day export decisions, it introduces a level of political volatility that makes the U.S. an unreliable partner. Allies and neutral nations may simply choose to design American components out of their supply chains entirely to avoid the headache.
Export controls are most effective when they are precise and strategic. Adding congressional veto power on top of already broad restrictions injects uncertainty into global markets, leaving companies without clear guidance.
There is a smarter path forward. Congress can exercise meaningful oversight without acting as a bottleneck for individual licenses. Hearings, classified briefings, and existing review mechanisms already allow lawmakers to hold the executive branch accountable while preserving clarity and predictability.
Rather than narrowing markets, Congress should focus on strengthening the foundations of American innovation: increasing support for domestic R&D, incentivizing private-sector investment, and streamlining permitting for critical infrastructure such as data centers.
Strategic competition will not be won by constraining America’s innovators. It will be won by expanding the scale, speed, and strength of the U.S. innovation ecosystem, the very conditions that made American technology dominant in the first place.
Mario Ottero is the Emergent Technology Policy Analyst at Americans For Prosperity.
