Congress Faces Bipartisan Backlash Over AI Chip Exports to China as FTC Targets Deceptive AI Marketing

Congressional Pushback on Trump Administration’s AI Chip Sales to China

Several congressional Democrats have voiced strong opposition to the Trump administration’s decision to approve advanced semiconductor exports to China. Their concerns focus on national security risks and potential legal violations. These objections came through three separate letters from both House and Senate members, highlighting bipartisan unease.

On August 22, Representative Raja Krishnamoorthi (D-IL) introduced the No Advanced Chips for the CCP Act of 2025. This legislation would require dual approval—from both the Executive Branch and Congress—before any AI chip exports to China could proceed. The bill includes limited exceptions for humanitarian or diplomatic reasons and aims to maintain strict control over sensitive technology transfers.

The progress of this bill is being closely watched as it could influence future U.S. policy on semiconductor exports amid the global AI competition.

Republican and Democratic Concerns Differ in Approach but Align in Caution

On August 25, Representative John Moolenaar (R-MI), chair of the House Select Committee on the CCP, urged the administration to tighten export controls on advanced semiconductors to China. He proposed a “rolling technical threshold (RTT)” framework, which would limit exports to technologies only slightly more advanced than China’s domestic capabilities. This approach also aims to cap China’s AI computing power at 10% of U.S. levels to protect American leadership in AI.

At the same time, senior Democrats expressed concern that the administration’s approval of export licenses, which included the U.S. government receiving a 15% share of corporate revenue, violates existing export restrictions. Representative Krishnamoorthi warned that monetizing these licenses could damage U.S. credibility with allies who depend on America’s integrity in technology controls.

Six Senate Democrats sent a similar letter emphasizing that national security depends on maintaining American innovation and technological superiority. This bipartisan pressure led to legislative efforts like the No Advanced Chips for the CCP Act of 2025, now under review by the House Foreign Affairs Committee.

FTC Takes Action Against AI Marketing Claims

On August 25, the Federal Trade Commission (FTC) filed a lawsuit against Air AI Technologies, accusing the company of deceptive marketing related to its conversational AI platform. The FTC alleges that Air AI exaggerated the tool’s capabilities and financial benefits, resulting in significant losses for many small business customers.

According to the complaint filed in the District Court of Arizona, customers lost up to $250,000 and were often left in debt. The FTC requested a temporary restraining order to immediately halt Air AI’s marketing activities, signaling its continued commitment to enforce truthful claims in the AI sector.

FTC’s Stance on AI Marketing Accountability

Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection, highlighted the importance of protecting small businesses from false promises. He stated that misleading claims about AI tools harm hardworking entrepreneurs and damage trust in legitimate AI solutions.

Despite suggestions in the Trump administration’s AI plan to ease enforcement, the FTC’s unanimous vote to file this complaint confirms its role in holding AI companies accountable for their marketing practices.

The complaint outlines several specific allegations:

• Air AI promoted its tool as a conversational AI capable of replacing human customer service agents.
• The company claimed it could generate significant profits when used alongside its other products.
• Customers did not achieve the promised financial outcomes and were denied refunds despite assurances.
• The company made unsubstantiated earnings claims and failed to provide necessary disclosure documents.

For marketing professionals, this case underscores the critical importance of accuracy and transparency when promoting AI products. Overpromising capabilities or financial returns not only risks legal consequences but can also damage brand reputation and customer trust.

Those interested in sharpening their understanding of AI’s practical applications and ethical marketing may find value in exploring relevant courses and certifications to stay informed about both opportunities and compliance risks. Visit Complete AI Training’s marketing-focused AI courses for more information.