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The U.S. government plans to withdraw a rule introduced under the Biden administration that had aimed to restrict exports of advanced AI chips — a policy that had posed challenges for major semiconductor companies like Nvidia (NVDA-1.54%) and AMD (AMD+0.47%).
“The Biden AI rule is overly complex, overly bureaucratic and would stymie American innovation,” a spokeswoman from the Commerce Department said in a statement. The Trump administration intends to issue a revised version of the rule, which was set to come into effect on May 15. This process could take months to finalize, sources told Axios.
The regulation in question — titled the Framework for Artificial Intelligence Diffusion — would have limited exports of AI chips to over 100 countries. These restrictions aimed to prevent countries from bypassing U.S. export controls, particularly in relation to China.
Chipmakers had criticized the rules, however. They argued it would give an advantage to Chinese competitors, such as Huawei, as they develop and sell their own AI hardware, foregoing an opportunity to ensure that much of the world would rely on American technology. The rule would have affected Nvidia’s ability to sell its high-demand graphics processing units, or GPUs, in markets such as India, Mexico, Singapore, and Switzerland.
The shift could reflect a relaxing stance toward regulating AI, offering a momentary boon for chipmakers. Since Bloomberg first reported the reversal on Wednesday, Nvidia and AMD stocks have gained 4.4% and 3.4%, respectively.
But any respite could prove temporary, and obstacles persist when it comes to accessing the crucial Chinese market.
Nvidia’s most powerful chips, including the A100 and H100, are already banned from export to China, as a result of Biden-era restrictions.
Last month the Trump administration also introduced new license requirements for less powerful chips by Nvidia and AMD in order to comply with export controls. Nvidia said these requirements on its H20 chips had resulted in a $5.5 billion hit to its quarterly earnings, according to a Securities and Exchange Commission filing. The company’s earnings are scheduled to be released May 28.