Former US president, Joe Biden has announced strict rules to limit the export of AI chips. The goal of this restriction is to prevent countries like China and Russia from misusing the power of AI technology. This is part of an ongoing effort by the US government to protect its technology from being used in harmful ways by other countries.
Moreover, this decision will focus on AI development in US allies and encourages global companies to follow American Standards. The key allies will have almost unlimited access to American Chips, while the countries considered adversaries will have very limited or no access to the chipsets.
This new administration planning will be affecting companies like Nvidia and AMD. Nvidia already faces limitations in selling AI chips to China and Russia, but these markets account for a very small portion of its revenue.
The US has already placed limitations over the restriction on AI chipset sales to more than 40 countries fearing misuse. Also, some officials want more strict limitations and controls to stop the misuse of AI in the Middle East.
Nvidia is, however, worried that this imposition might harm its global competitiveness and slow down the U.S. economy in the long run. After the Biden government's announcement, Nvidia’s stock dropped by 1% in after-hours trading.
Similarly the AMD also saw a small decline on Wednesday following a drop of 4% earlier in the day and then it was trading slightly down on Thursday pre-market trading which is near a 52-week low.
At the CES 2025 tech event, Nvidia CEO Jensen Huang showcased new AI devices, personal AI computers powered by their latest Blackwell chip. However, even after the innovation, Nvidia’s stock fell by more than 6% due to the recent export restrictions and global competition in AI will affect the company.
The Biden administration’s new restrictions on AI chip export to protect US Technology and give priority to national security pose greater challenges to companies Nvidia, AMD, and other players too by impacting their global competitiveness and stock performance. Both the company also continue to bring innovation irrespective of the growing regulatory framework.
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