Former US President Joe Biden announced strict rules restricting the export of AI chips. The purpose of this restriction is to prevent countries like China and Russia from abusing the power of AI technology. This is part of the U.S. government’s continued efforts to prevent its technology from being used in harmful ways by other countries.
Additionally, the decision will focus on AI development in U.S. allies and encourage global companies to follow U.S. standards. Key allies would have near-unlimited access to American chips, while countries considered adversaries would have very limited or no access to chipsets.
This new management plan will impact companies like Nvidia and AMD. Nvidia already faces restrictions on AI chip sales to China and Russia, but those markets account for a small portion of the company’s revenue.
The US has already imposed restrictions on the sale of AI chipsets to more than 40 countries due to concerns about misuse. Some officials also want stricter limits and controls to prevent AI from being misused in the Middle East.
But NVIDIA is concerned that the levy could hurt its global competitiveness and slow the U.S. economy in the long run. Nvidia shares fell 1% in after-hours trading following the Biden administration’s announcement.
Similarly, AMD saw a modest decline on Wednesday after falling 4% earlier in the day, before falling slightly in Thursday’s pre-market trading and trading near its 52-week low.
At the CES 2025 technology event, Nvidia CEO Jensen Huang introduced a new AI device, a personal AI computer powered by the latest Blackwell chips. But even after the innovation, global competition in AI will impact the company, with Nvidia’s stock price down more than 6% due to recent export restrictions.
