Illustration: Tiffany Herring/Axios
Commerce's Jeffrey Kessler on Thursday told House lawmakers that boosting his bureau's budget is a matter of national security in the global AI race.
Why it matters: At a time when agencies across the federal government are facing steep budget cuts, President Trump is asking Congress to invest more in the Bureau of Industry and Security.
- The agency is at the heart of enforcing export controls, viewed by some as crucial for cutting off China's access to the most advanced chips used for AI.
State of play: Kessler, the under secretary of Commerce for industry and security, testified before the House Foreign Affairs South and Central Asia Subcommittee.
- Trump is asking for $303 million for BIS for FY26, which Kessler noted is "the single largest investment in BIS history and one that will significantly bolster our ability to protect national security."
By the numbers: Kessler told lawmakers that the money would go toward nearly 200 enforcement agents stationed across the U.S. who would be responsible for charging criminals transmitting U.S. tech to adversaries.
- It would also allow the bureau to increase the number of overseas export control officers, who monitor foreign entity compliance with export controls, from 12 to 30, he said.
- $6 million would go toward specialized engineers and technical experts.
Catch up quick: The Trump administration recently scrapped former President Biden's AI diffusion rule, which aimed to tackle adversary circumvention of U.S. chips in third-party ally countries.
- Export controls are now part of broader U.S.-China trade negotiations.
The other side: Subcommittee Ranking Member Sydney Kamlager-Dove supported boosting the BIS budget, but said export controls alone won't win the AI race.
- "We can't just slow China down. We have to simultaneously speed up and sustain our lead in cutting edge technology," Kamlager-Dove said, noting Trump's request would slash R&D funding.
- NSF's budget for chip research would be slashed by 54% and its budget for commercializing new chip developments would be cut by 28%.
What we're watching: Some industry players and experts also say export controls do more harm than good to U.S. competitiveness, cutting off the U.S. from a huge market and sparking innovation within China.
- But policymakers are continuing to favor export control regimes.
- Rep. Jefferson Shreve at Thursday's hearing announced he plans to introduce the BIS Strength Act, which he said would prevent adversarial nations from acquiring products that could boost their economic competitiveness.
