Senator Hawley has expressed concerns that any financial or data resources flowing into Chinese AI could ultimately be used against the United States.

The rapid development of Chinese AI technology underscores a lag in U.S. responses from both business leaders and lawmakers regarding competition in the sector.

In response to the emergence of the Chinese AI model DeepSeek, GOP Senator Josh Hawley has introduced the Decoupling America’s Artificial Intelligence Capabilities from China Act.

This legislation comes on the heels of market disruptions caused by DeepSeek, which is cheaper to operate than models from U.S. companies like Meta and OpenAI.

DeepSeek's launch has already negatively impacted U.S. stock markets, particularly leading to a significant drop in Nvidia's stock before a slight recovery.

The introduction of this bill follows recent market volatility related to DeepSeek, which has affected publicly traded stocks in the AI sector.

The proposed legislation aims to ban exports and imports of AI technology from China, prohibit American companies from conducting AI research there, and halt U.S. investment in Chinese AI firms.

White House AI czar David Sacks has indicated that there is substantial evidence suggesting DeepSeek distilled knowledge from OpenAI's models.

Microsoft and OpenAI are currently investigating whether DeepSeek utilized their data to develop its AI model, raising concerns about intellectual property theft.

President Biden's administration has previously implemented export controls on AI chips, with national security advisors warning that the U.S. is only slightly ahead of China in AI technology.

Major companies affected by these developments include Nvidia, Meta, Advanced Micro Devices, Intel, Qualcomm, and others.

Unlike previous legislation that targeted specific companies, Hawley's bill aims at all AI-related technologies, making it more difficult for China to exploit loopholes.