Commerce's Jeffrey Kessler today 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 today'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.

More than 50 civil rights organizations are calling on senators to remove the 10-year freeze of state-level AI regulation from the reconciliation bill, per a letter shared exclusively with Maria.

Why it matters: The moratorium language has sparked broad backlash from advocacy groups and blue and red states.

• The letter is led by The Leadership Conference on Civil and Human Rights and contends a freeze would likely result in "severely damaging unintended consequences."
• Color Of Change, the NAACP and Public Citizen are among the signatories.

What's inside: "A 10-year moratorium will extinguish states' ongoing debates and efforts to address AI challenges, including the problem of algorithmic discrimination, leaving people vulnerable and exposed to faulty technology," the letter states.

• The groups point to Colorado, Washington state, and Virginia laws that require facial recognition technology to be subject to independent testing and or accuracy standards.
• Getting rid of those laws would mean untested technology could be used on the public and lead to false arrests or racial profiling, the letter notes.
• The groups also go after the Senate attempt to tie the AI moratorium to BEAD funds, saying it "presents a false choice that no member of Congress should accept."

The other side: Moratorium backers say the the measure would help prevent a patchwork of regulations and that there should be a federal standard.

• Congress is nowhere near passing comprehensive guardrails.

What we're watching: Opposition in the Senate and House is growing, and there are bipartisan efforts to strip the measure from the bill.

📜 STOP CSAM: The Senate Judiciary Committee today approved the STOP CSAM Act, which Sens. Josh Hawley and Dick Durbin reintroduced last month with Sens. Chuck Grassley, Amy Klobuchar and Mark Kelly as cosponsors.

• The committee unanimously advanced the legislation, although a number of Republicans didn't show up at the markup's scheduled time and voted yes by proxy. Grassley said he told the Republicans members they didn't need to show up until an hour after the markup started and that he "screwed up."
• Klobuchar said the bill builds on the TAKE IT DOWN Act and "further empowers victims by opening the courtroom door to those harmed by social media companies."
• The Internet Society put out a letter ahead of today's markup to express its concerns with the legislation, particularly with "the broad scope and sweeping civil liability the bill would introduce."

💰 Micron money: Micron Technology said today it will expand its U.S. investments to approximately $200 billion in semiconductor manufacturing and R&D, a $30 billion increase from its previous investment plan.

🗳️ Science markup: House Science yesterday voted 35-0 to approve the Small Business Artificial Intelligence Advancement Act, which would direct NIST to develop resources for small businesses to help them use AI.

• "Giving this assignment to NIST while it is being drastically reduced, I think in violation of the Impoundment Act, is a real challenge," Ranking Member Zoe Lofgren said in her opening remarks.
• Lawmakers also voted 35-0 to advance the Post Quantum Cybersecurity Standards Act, which would amend the National Quantum Initiative Act and support research into quantum computing and cryptography.

🤖 New AI bill: Rep. Darin LaHood today introduced the Advanced AI Security Readiness Act — which would direct the NSA to develop strategies to secure AI-related tech — alongside House China Select Committee Chair John Moolenaar, Ranking Member Raja Krishnamoorthi, and Rep. Josh Gottheimer.