The bipartisan legislation was easily approved in a vote late on Thursday. It is designed to bolster US competitiveness in cutting-edge industries and curb exports to China and other foreign adversaries, according to lead co-sponsor Senator Jim Banks, an Indiana Republican.
US tech leaders and groups have criticised the bill, arguing it would instead restrict competition and weaken innovation.
“Today, the Senate acted to make sure American customers – including small businesses and start-ups – aren’t forced to wait in line behind China’s tech giants when purchasing the latest AI chips,” lead Democratic co-sponsor Senator Elizabeth Warren of Massachusetts said in a statement.
Senators approved the measure as part of their annual defence policy bill after a month-long stalemate. But its path to becoming law remains unclear.
