New US Chip-control Rules Decelerates the AI Trade But Incoming President Trump May Change the Slowdown
Go Wire
January 15, 2025
GoGPT Summarizes Articles
In the last week before stepping down from the US presidency, Biden has cooled the AI trade in the US market with its latest restrictive chip regulations.
According to new regulations announced on Monday (Jan. 13), the Department of Commerce capped the number of advanced AI chips that can be exported to certain countries and imposed additional licensing requirements for the research and development of AI technology. The unique feature of the new regulation is that export limitations and license approvals of AI chips expand from China to over 120 countries.
US Commerce Secretary Gina Raimondo asserted that the policy helped build a reliable technology ecosystem globally and reduced national AI-related security risks.
Raimondo added that the measure prevented US adversaries from accessing advanced AI technology and did not harm innovation or US technological leadership.
The measure made investors nervous. Nervousness caused a sell-off in chip stocks, causing US chip stocks generally to fall on Monday. Chip companies actively criticized the policy.
Nvidia $NVDA said the new policy unprecedentedly jeopardized US AI leadership. Nvidia believed that the policy increased foregin companies’ difficulty to obtain Nvidia chips, forcing countries on the US restricted list to choose Chinese AI chips, thus strengthening China's position in AI chips.
Luckily for Nvidia, the new rules will not take effect until after a 120-day public comment period. The Trump administration, which will take office next week, is likely to repeal or change the new rules. Hence, the sell-off in chip stocks could be temporary.
Although the Trump team has not commented on the new regulations, during his presidential campaign, Trump made it a principle to withdraw the Biden administration's executive order hindering AI. Trump may revise all AI chip policies to comply with the principle.
Nvidia's business could strengthen if the Trump administration deregulates the building of AI infrastructure and the development of nuclear reactors, which are critical to supplying energy for AI projects over the next decade.
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