trump to rewrite ai chip export rules: will nvidia win or lose?

trump to rewrite ai chip export rules: will nvidia win or lose?

2025-05-09 general

Washington, Friday, 9 May 2025.
the trump administration is planning to overhaul ai chip export policies, potentially reshaping the semiconductor landscape. the biden-era rules divided countries into tiers, restricting china’s access, but trump aims for direct negotiations, sparking debate. nvidia, which criticized the previous rules as overly complex, might benefit from eased restrictions, especially in accessing the chinese market. however, the future remains uncertain. nvidia’s ceo once said the chinese ai chip market could reach $50 billion in a few years.

Biden’s ai diffusion rule

The biden administration’s ai chip export restrictions, known as the ‘ai diffusion rule,’ categorized countries into three tiers [1]. tier 1 included allies with near-unrestricted access, while tier 3, including china, faced bans [1]. this framework, set to take effect on may 15, aimed to prevent u.s. technology from reaching adversaries [1][2]. however, the trump administration views the biden ai rule as ‘overly complex’ and stifling to american innovation [1]. commerce department officials considered the tiered system ‘unenforceable’ [2].

trump’s plan and nvidia’s stance

the trump administration plans to replace the tiered system with a simpler rule, potentially involving government-to-government agreements [1][2]. this approach aligns with trump’s preference for direct negotiations [7]. nvidia has been critical of the biden-era restrictions [1]. a nvidia spokesperson stated that american firms should focus on innovation rather than restrictive measures [1]. nvidia had also criticized amazon-backed ai startup anthropic for defending the regulation [1]. nvidia’s stance suggests that it anticipates benefiting from a potential rollback of restrictions.

market reaction and nvidia’s potential gains

news of the potential policy shift led to a rally in chip stocks [3]. the philadelphia semiconductor index rose by over 2%, and nvidia’s stock price increased by over 3% in late trading, recovering 4.8% from its intraday low [3]. nvidia’s ceo, huang renxun, previously estimated that the chinese ai chip market could reach approximately $50 billion in the coming years [4]. access to this market could significantly boost nvidia’s revenue and stock value [4]. however, the exact nature of trump’s new regulations remains uncertain [4].

concerns and potential pitfalls

despite the potential benefits for nvidia, some analysts suggest the trump administration may implement other controls [4]. one possibility involves strengthening control over chip exports, potentially turning ai chip regulations into a trade negotiation tool [4]. in april, the trump administration imposed indefinite export controls on nvidia’s h20 chips to china [4]. these actions highlight the risk that even with a rollback of the biden-era rules, nvidia may still face restrictions in accessing the chinese market [4].

china’s ai chip independence

amidst u.s. restrictions, china is increasing its domestic ai chip production [7]. morgan stanley predicts that china’s ai chip self-sufficiency rate could reach 82% by 2027 [7]. chinese companies are increasingly adopting domestic ai chips like huawei ascen, baidu kunlunxin, and cambricon [7]. this trend indicates a gradual decrease in china’s reliance on u.s. ai chips [7]. for nvidia, this means that even with eased restrictions, the long-term growth potential in china might be limited by increasing domestic competition [7].

the trump administration’s potential overhaul of ai chip export policies presents both opportunities and risks for nvidia [1][4]. while a rollback of the biden-era rules could grant nvidia greater access to the chinese market, new restrictions or continued tensions could offset these gains [3][7]. investors should closely monitor policy developments and assess nvidia’s ability to navigate this complex and evolving landscape [GPT]. the company’s adaptability and diversification strategies will be crucial in determining its long-term success [GPT].

Bronnen


ai chips export policy