Trump to revoke Biden-era AI chip export rule limiting Nvidia and AMD

Trump administration scraps restrictive AI chip export rule, easing pressure on Nvidia and AMD amid growing global semiconductor competition.

The Nvidia Corp. logo on the company's Blackwell GPU chip displayed at the Nvidia AI Summit Japan in Tokyo, Japan, on November 13, 2024. Photo by Akio Kon/Bloomberg

By Alana Salsabila and Clarisa Sendy

In a significant policy reversal, the Trump administration has announced plans to revoke a regulation from the Biden era that sought to limit the export of artificial intelligence chips. The decision, which directly affects major semiconductor companies such as Nvidia and AMD, marks a strategic pivot toward supporting U.S. technological dominance in the global AI race.

The original regulation—part of what was known as the Framework for Artificial Intelligence Diffusion—was set to take effect on May 15. It introduced a complex export control structure targeting high-performance AI chips sold in countries outside of traditional U.S. allies. A senior U.S. official explained that the rule, riddled with bureaucratic hurdles, had become “unenforceable” and would be replaced by a more streamlined approach designed to promote American innovation while safeguarding national security.

Nvidia and AMD stand to benefit from deregulation

Nvidia, which has seen meteoric growth driven by global demand for its graphics processing units (GPUs), would have been among the hardest-hit by the Biden-era rule. The regulation aimed to cap AI chip exports to countries like India, Singapore, and Switzerland—nations not considered core U.S. allies but integral to the semiconductor supply chain.

Under the now-revoked rule, the export of powerful data center chips, including Nvidia’s best-performing models, would have required tiered licensing approval. More than 100 countries fell into the regulation’s middle category, receiving fewer exemptions than G7 members and Taiwan. The policy had already sparked backlash from both the European Union and the U.S. tech industry, including Nvidia and AMD, who argued it would stifle growth and push global buyers toward Chinese alternatives like Huawei.

“The AI Diffusion Rule would have created unnecessary friction in global supply chains,” said a spokesperson for Nvidia. “With its revocation, the U.S. is seizing a once-in-a-generation opportunity to lead in artificial intelligence and rebuild high-tech manufacturing jobs at home.”

Following the announcement, Nvidia’s shares climbed 3 percent in after-hours trading, while AMD saw a 1.8 percent increase, signaling investor approval for the administration’s new direction.

A new era of AI regulation under Trump

Instead of imposing strict export controls on AI chips, the Trump administration intends to develop a new framework that ensures U.S. semiconductor firms maintain their competitive edge. According to the administration, this will not be an immediate change; a formal rulemaking process will be required, which could take months. Still, the shift is seen as a clear signal that Washington is rethinking how to balance economic leadership with national security.

The original Biden policy had been designed to prevent AI-enabling chips from being rerouted through third countries to Chinese buyers. Yet, critics argued the policy lacked precision and risked alienating important economic partners. The Trump administration’s upcoming overhaul seeks to preserve that security objective while eliminating burdensome restrictions on companies like Nvidia and AMD.

The change also reflects a broader trend in Trump’s tech policy—namely, reducing government red tape to accelerate private sector innovation. This approach contrasts sharply with Biden’s more cautious regulatory stance, especially regarding the export of strategic technologies.

Industry welcomes relief amid geopolitical tensions

Tech industry leaders have widely welcomed the news. The Semiconductor Industry Association, which had previously expressed concern about the impact of the export limits, issued a statement commending the administration’s responsiveness to industry feedback. Analysts suggest the removal of the export cap could restore momentum in AI chip sales and renew trust between the federal government and semiconductor manufacturers.

At the same time, Trump officials reaffirmed their commitment to preventing adversarial nations from acquiring advanced U.S. technology. The administration emphasized that future rules would be crafted to carefully balance open trade with the need for security, particularly in regions with strong ties to China.

“This isn’t about giving China a pass,” said the U.S. official involved in the decision. “It’s about making sure we don’t shoot ourselves in the foot in the process of trying to keep our tech secure.”

Broader export controls still in play

While Nvidia and AMD are set to benefit from the rollback of the AI Diffusion Rule, broader restrictions still apply to exports of top-tier chips to China. Under the Biden administration, high-performance chips like Nvidia’s A100 and H100 were already banned from export to China. Trump’s administration has maintained those prohibitions and introduced further license requirements for less powerful chips specially designed for the Chinese market.

In March, Nvidia disclosed that the ban on its H20 chips had resulted in a $5.5 billion revenue hit, underlining the stakes involved in U.S. semiconductor policy. The company is expected to announce its first-quarter earnings on May 28, and investors will be watching closely for signs of how the policy reversal may affect future guidance.

National security review of tariffs continues

Meanwhile, the Trump administration is still conducting a broader national security review into semiconductor tariffs. Although AI chips have temporarily escaped the harshest reciprocal tariffs announced in early April, the review could result in new trade barriers for certain chip components or production equipment.

Any new tariffs could potentially offset the relief brought by the export policy change, but for now, the semiconductor industry is viewing the rollback as a win. The upcoming weeks will be critical as the administration seeks to clarify its long-term AI strategy while keeping American innovation competitive on the world stage.

Trump’s policy realignment may shape AI’s global future

This latest policy development demonstrates how the Trump administration is prioritizing economic competitiveness in the rapidly evolving AI sector. By reversing the Biden-era AI chip export rule, the White House aims to foster a more favorable environment for U.S.-based semiconductor firms while maintaining vigilance over technology transfers to strategic rivals.

As companies like Nvidia and AMD continue to power advancements in AI, robotics, and data analytics, the regulatory decisions made today will have far-reaching consequences. The global race for technological supremacy is accelerating, and with Washington now shifting course, U.S. chipmakers may once again find themselves in a stronger position to lead.