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The United States plans to revoke a Biden administration rule aimed at restricting the export of artificial intelligence chips, which could impact sales for semiconductor companies like Nvidia and AMD. A US official stated on Wednesday that the regulation, set to take effect on May 15, was filled with complexities that rendered it “unenforceable.” Instead, the Trump administration plans to revise the rule.
This decision comes as the new administration adopts a more relaxed stance on regulating AI and other advanced technologies domestically, amid increasing competition from Chinese businesses in the sector. The changes to the Framework for Artificial Intelligence Diffusion rule would alleviate constraints on companies like Nvidia, which was facing limitations on AI hardware exports to countries such as India, Switzerland, and Singapore.
Nvidia has experienced strong demand for its graphics processing units, elevating it to one of the world’s most valuable companies in a short span. Rather than implementing the Biden-era controls, the Trump administration intends to draft a new rule to support US technological growth while restricting adversaries’ access to critical technology. However, this process is expected to take time.
The existing export controls, introduced during Biden’s presidency, established a three-tier licensing framework for AI chips used in data centers, like Nvidia’s high-performance GPUs. The goal was to hinder Chinese firms from bypassing US export restrictions via third countries amid geopolitical tensions over AI infrastructure.
The proposed legislation imposed limits on chip export volumes, except for a few countries, including G7 members and Taiwan, leaving over 100 countries in an intermediary category. The EU, Nvidia, and the chip and technology sectors criticized these rules, which were open for industry feedback. They argued the regulations could give an edge to Chinese competitors like Huawei by enabling them to develop and market their own AI hardware, potentially reducing reliance on American technology.
Nvidia did not comment immediately. Its shares rose by 3 percent following the announcement, while AMD saw a 1.8 percent increase. Nvidia’s most advanced chips are already restricted from being exported to China due to Biden administration-imposed performance-based restrictions.
Last month, the Trump administration announced new licensing requirements for less advanced chips tailored for the Chinese market by Nvidia and AMD, aligning with export control policies. Nvidia reported a $5.5 billion impact on its earnings due to the prohibition on its H20 chips.
A broader national security review on potential new semiconductor tariffs is underway, subsequent to a temporary exemption from the harshest reciprocal duties on US trade partners. Nvidia is scheduled to release its first-quarter results on May 28.
Additional reporting was provided by Rafe Uddin in San Francisco.
