Oren Cass Testifies Before House Foreign Affairs Committee

On January 14, American Compass chief economist Oren Cass appeared as a witness before the House Foreign Affairs Committee during their hearing titled Winning the AI Arms Race Against the Chinese Communist Party. Cass’s opening statement is below:

Good morning Chairman Mast, Ranking Member Meeks, and Members of the Committee. Thank you for inviting me to participate in today’s hearing.

My primary message to the committee is this: Advanced AI compute is essential to the AI era, enabling both economic dynamism and novel military capabilities. Denying our foreign adversaries access to this resource, then, is a matter of both geostrategic competition and national security.

I should confess, that is not my own message. I copied it verbatim from the Trump administration’s AI Action Plan, thoughtfully developed when the White House moved through a reasoned policy process last year. Again, the administration’s stated policy, which is exactly correct, is:

Advanced AI compute is essential to the AI era, enabling both economic dynamism and novel military capabilities. Denying our foreign adversaries access to this resource, then, is a matter of both geostrategic competition and national security.

Consistent with that reality, the Trump administration moved last year to impose robust export controls on advanced AI chips, prohibiting the sale even of Nvidia’s less powerful H20 chip, which the Biden administration had intended to license.

But we are here today because the administration has inexplicably reversed course, and is now poised to begin licensing the sale to China of Nvidia’s H200, a far more advanced chip, in mass quantities.

U.S. policy has been seemingly reshaped by business executives who promote China as a partner and prioritize short-term profit over the national interest.

Most prominently, Nvidia CEO Jensen Huang has argued that the term “China Hawk” should be a “badge of shame.” Huang has also argued that Chinese leaders “want companies to come to China and compete in the marketplace,” and says that we should take statements by the Chinese Communist Party “at face value.”

Of course, under our constitution, citizens have the right to petition their government, no matter how unwise their ideas. But also under our constitution, it is the people’s representatives, not multinational corporations, that set national policy, to ensure that it advances the national interest.

When it comes to AI, that process has broken down. Congress must intervene.

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I had some difficulty preparing this testimony, because it is hard to know how best to make the case for something so self-evidently true as the proposition that the United States should deny China access to advanced AI chips. But it is worth underscoring why this is the case:

First, the total amount of computational power available in a country is quicky becoming a key determinant of its technological capabilities, for both economic and military purposes. As models have come to rely more heavily on inference, meaning the computation required to complete a task, the ability to expand capacity with the fastest, most cost-effective, and most energy-efficient chips has become increasingly vital.

Second, the United States currently holds a decisive advantage over China on this front. Leading-edge chip design and manufacturing equipment are controlled by the United States and our allies, placing our chips at least a full generation ahead of those that China can produce on its own, and allowing us to produce many more of the more powerful chips.

Analysts estimate that export controls imposed by the Biden administration and extended by the Trump administration have helped the United States to build a five-fold advantage in total computational capacity.

Third, as investment in AI infrastructures surges, chip manufacturers are struggling to meet demand. Nvidia has repeatedly declared itself “sold out” and customers have faced long wait times.

More recently, the Chip-on-Wafer-on-Substrate packaging process and the high-bandwidth memory critical for inference have become bottlenecks. Redirecting supply toward China will not only boost its technology sector, but also hamper ours.

Thanks to short-sighted actions by policymakers and corporations, the United States has already given away leadership in key technologies and supply chains to China. Our leadership in AI represents a crucial countervailing advantage that we must leverage if we are to maintain our military superiority and rebuild our industrial base.  [4:00]

Blundering instead into exactly the same mistake yet again, giving away this crucial technology because CEOs believe they can win in China and investors want to make a quick buck, would be an unconscionable error of world-historical proportions.

Setting export control policy is ultimately the responsibility of Congress. Legislation like the AI OVERWATCH Act would be an important step forward and is well aligned with the executive branch’s AI Action Plan. Its requirements would ensure that licensing decisions are appropriate, the reasoning is well articulated, and the decisionmakers are accountable to the American people. What is going on now, behind closed doors, cannot continue.

Thank you again for the opportunity to testify, I look forward to your questions.

The arguments advanced by industry for selling advanced chips to China range from contradictory to nonsensical.

Sometimes the argument is that U.S. technology can entrench itself and become permanently dominant, other times it is that China is catching up to us so quickly that we may as well make a profit while we can, and perhaps learn from them.

Sometimes the argument is that we need profits in China to fund further research and development, never mind these companies are already among the most valuable and profitable companies in the world, and investors are gladly shoveling more money toward them.

Sometimes the argument is that the Chinese customers are just innocent social media companies, and the CCP has no control over them anyway.

Video of Cass’s remarks is available here.