The United States government launched the American AI Exports Program to help American firms win contracts from international customers. In a bid to enhance international competitiveness, the program risks stifling domestic competition, writes Javaid Sofi.
Chinese tech conglomerate Huawei offered to build artificial intelligence data centers for Egypt this summer, supplying roughly 2,000 units of its proprietary Ascend chips and promising to finish construction within a year. The United States State Department reportedly approached Nvidia, AMD, and Microsoft about preparing a competing offer.
Egypt is the kind of market the Department of Commerce hopes to reach through its American AI Exports Program, operated in collaboration with the State Department. Created by executive order in July 2025, the program organizes companies into consortia to offer complete AI systems abroad. Designated packages can receive priority consideration for diplomatic assistance, export-license review, and federal financing referrals, with financing still subject to each agency’s approval. The resulting menu is intended to give U.S. officials ready-made American technology packages to promote to foreign governments and businesses. The Department of Commerce received 78 applications before the June 30, 2026, deadline for its initial round.
Washington wants competition at home while promoting a protected American menu abroad. In February 2025, Vice President J.D. Vance criticized European regulation of American tech companies, while the Trump administration continued antitrust litigation against Google at home.
However, the impact of international competition does not stop easily at national borders. The program’s design risks favoring large American tech firms. Not only do these firms have the brand recognition and international experience to win these contracts, but the design of the system allows them to choose with whom they partner to create a package. This mechanism risks blocking smaller competitors and consolidating packages around a few names.
If government support flows mainly to a few Big Tech firms and their chosen partners, the program could strengthen those firms’ positions at home. Competing with Chinese firms does not require concentrating government support among a few American suppliers. Qualified smaller American firms need a more dependable route to that support.
Who gets onto the team
Under the current pre-set rules, a consortium must cover all five layers of the AI stack: hardware and related infrastructure, data pipelines, models, cybersecurity, and applications. It must offer all five even if an eventual customer buys only part of the package. An anchor member organizes the team through a participation agreement and submits the proposal. The anchor member must have international experience and the capacity to manage delivery across countries for its layer. Eligible foreign partners can join, but the anchor must meet U.S. ownership and location requirements. Therefore, an application developer, for example, seeking program designation has to assemble the other components or negotiate inclusion in someone else’s package offering.
Here is the competitive concern: Suppose an Egyptian ministry wants an Arabic-language application for public-service inquiries. A small American firm may offer a better fit than the application sold by the cloud company organizing an export consortium. If the organizer earns more from its own product, it has a reason to leave the rival out of its package. The ministry would then receive a government-promoted offer built around the organizer’s software. The smaller firm could still bid separately, but securing program designation would require assembling its own consortium, which it may lack the resources to organize. It could instead seek introductions and export assistance outside the program.
Once the consortium is assembled, U.S. officials promoting the designated package then carry the anchor’s commercial choices into their meetings with foreign customers. An introduction to a ministry or help arranging finance can give that package an advantage over a competing bid. Designation puts a package on the U.S. government’s menu of vetted AI offerings, and a foreign government may have diplomatic reasons to prefer it. This concern appeared in submissions to the Department of Commerce before applications opened. The Business Software Alliance argued that requiring the entire stack to apply for government assistance could give a few infrastructure providers control over which software companies enter eligible consortia. The Institute for Progress identified a related obstacle: negotiating leadership, liability, and shared costs could deter smaller or specialized firms from participating.
Companies can join multiple consortia, and the Department of Commerce imposes no numerical cap on designations. It also retains discretion to assist firms outside the program. An anchor has good reasons to admit a strong outside product, especially if doing so helps it win the whole contract. A developer with several viable partners can negotiate among them. For a smaller firm, the question is whether it can turn to another consortium on workable terms if one organizer rejects it.
Amazon Web Services confirmed to Politico that it is represented among the 78 applications that the Department of Commerce received in its initial round. A Department of Commerce official also revealed that multiple small companies had applied, too. The agency declined to identify the participating companies, and the report gives no breakdown showing how many small firms are involved, what roles they hold, or how often the same suppliers appear across applications. The 78 applications also do not reveal how many such alternatives exist or how much priority government assistance improves a bidder’s chances of winning a sale. Reports of small-firm applications are encouraging, but the program’s structure could still limit their access to support. The Department should examine who controls which firms are invited to join a consortium and whether participation agreements restrict a smaller firm’s ability to join another team or sell separately. It should also consider allowing firms to seek program designation for only the technology layers needed for a particular sale.
There is a practical case for selling complete packages. A ministry buying an AI system needs someone answerable when it fails, and U.S. officials need an offer they can take to buyers considering, particularly, Chinese alternatives. Combining products also takes work. Replacing one component can create security or compatibility problems elsewhere in the system. For sales involving several components, the contract should identify the integrator responsible for making them work together, whether the anchor or another provider. It should also require making transparent information regarding compatibility and security testing for products that can be added to the package. If the integrator sells a competing product, control over technical information or testing could give it a way to delay a rival’s inclusion or make it more expensive.
What’s at stake at home
Hawaii-based Ai.Fish, a small American AI company, won a Canadian government contract in 2023 to develop AI tools for monitoring fisheries. Canada’s procurement record lists its total value, including amendments, at 1.09 million Canadian dollars. For a small firm, a foreign contract can fund further development and establish a record of delivery that helps it win customers at home. When federal support repeatedly helps an anchor and its partners sell their products, a challenger may lose both current revenue and the chance to build that record. The Department of Commerce does weigh these domestic benefits in its export advocacy decisions. Its U.S. Government Advocacy Policy treats opportunities for small and medium-sized exporters, future exports, and benefits to U.S. technological capabilities as reasons to provide support.
However, ordinary advocacy approval does not automatically bring the AI program’s priority licensing review and financing referrals. The program’s published designation criteria also do not explicitly require scrutiny of whether an anchor’s supplier-selection arrangements restrict competition among American firms. The Department of Commerce should make that question part of its review before granting priority support.
Washington has its own reason to care. A buyer can purchase only part of a package, but the package American officials promote reflects the anchor’s choice of suppliers. If that choice leaves out an American product better suited to the buyer’s needs, the offer could be less competitive against suppliers such as Huawei.
A route for challengers
The Department of Commerce should open the on-demand track, which its website still lists as “coming soon.” This route would cover only the technology layers required for a particular sale. Its rules should allow a qualified American firm to apply on its own when the buyer needs only that firm’s component. Otherwise, the firm has to recruit a team for products the customer is not buying. Because the executive order calls for full-stack proposals from consortia, the administration should amend that requirement to make this individual route explicit.
For that route to matter, approved individual suppliers need access to the kinds of priority assistance offered to consortia. Ordinary export advocacy does not automatically confer those benefits. The new route should make firms eligible for priority introductions, financing referrals, and export-license review when a license is required, leaving approval of loans and licenses with the responsible agencies. The Department of Commerce would assess those requests against published criteria, including the value of the export and the firm’s capacity to deliver. A software sale may require much less help than a data center.
When two American bids seek help for the same contract, officials also need a rule for handling them. This is the question raised in the Computer & Communications Industry Association’s filing, which calls for clarity on competing bids and support for firms outside designated consortia. The U.S. Government Advocacy Policy already covers projects involving foreign-government decision-makers and foreign competition. When several American bidders qualify for advocacy, officials generally promote them without preference, subject to exceptions such as differences in U.S. export content and other national-interest considerations. The Department of Commerce should confirm that this presumption applies when a consortium and an independent supplier both qualify for advocacy.
To see whether smaller suppliers are gaining access, the Department of Commerce should publish each approved consortium’s members and their roles. A long membership list may conceal restrictive terms, so reviewers also need to examine whether participants can sell independently or join another team. Commercial details can remain confidential while the Department reports the criteria it uses to assess those arrangements. Where an anchor competes with a participating supplier, expertise from the Federal Trade Commission or Justice Department could help reviewers identify terms that restrict the supplier’s other sales. Review takes staff time, and smaller firms may have less capacity to navigate the process. If the Department of Commerce also published its reasons for each support decision, a firm could tell whether it was treated differently because of its deal or because it stood outside a consortium.
For packages receiving government support, the Department of Commerce should require an anchor that sells a competing product to document the technical reasons for rejecting an American supplier on compatibility or security grounds.
Federal support should make sure all qualified American firms can reach international customers. It will benefit competition at home and international competitiveness in the long run, too.
Author’s Disclosures: The author reports no conflicts of interest. You can read our disclosure policy here.
Articles represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty.
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