CoinDesk
Senators Tim Scott and Bill Hagerty introduced a bill Tuesday giving the U.S. Commerce Department authority to block transactions involving AI technology designed, developed, manufactured, or supplied by persons owned, controlled, or directed by foreign adversary countries. The two Republicans are the same pair who shepherded the GENIUS Act for stablecoins into law last session, with Scott chairing the Senate Banking Committee and Hagerty authoring that framework.
The bill would codify a new assistant secretary of commerce for information and communications technology supply chains to oversee the authority, while carving out public access to open-source AI software. "Americans should not have to worry that China or Russia can use the technology in our cars, phones, or networks against us," Scott said in announcing the legislation.
Why it matters
Foreign adversaries under existing U.S. national-security designations include China, Russia, Iran and North Korea. The bill lands weeks after President Donald Trump's executive order promoting U.S. AI innovation, which paired domestic-build incentives with language to "protect American ingenuity and intellectual property from exploitation and theft by adversaries." Pairing the open-source carveout with a new statutory enforcement post is the operative compromise: the U.S. wants to keep adversary capital and compute out of its supply chain without cutting developers off from open-weight models.
Market impact
The legislation faces a narrow window. Congress is winding toward the summer break and midterm elections, leaving little chance the bill advances standalone unless it gets attached to a must-move vehicle. For AI infrastructure vendors, model labs, and chip exporters, the practical read is that Commerce's gatekeeping authority, not the bill text itself, is the regulatory variable to watch through the rest of the year.
Frequently asked questions
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Who introduced the bill and what is their track record on crypto?
Senators Tim Scott and Bill Hagerty, both Republicans. Scott chairs the Senate Banking Committee and Hagerty authored the GENIUS Act for stablecoins, which passed into law last session.
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What authority would the bill give the Commerce Department?
Commerce would be able to block transactions involving AI technology designed, developed, manufactured, or supplied by persons owned, controlled, or directed by foreign adversary countries.
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Which countries count as foreign adversaries under the bill?
Nations actively working against U.S. national security under current designations: China, Russia, Iran, and North Korea.
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Does the bill address open-source AI?
Yes. It explicitly seeks to maintain public access to open-source AI software even as it grants Commerce new gatekeeping authority.
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What is the bill's realistic path through Congress?
Limited. The session is winding toward summer break and midterm elections, so the bill has little chance of advancing standalone unless attached to a must-move legislative vehicle.
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