Nvidia stock falls after Biden administration releases updated export rule for AI chips
Nvidia stock (NVDA:It was down 3% early Monday after the Biden administration issued an updated export rule aimed at controlling the flow of AI chips to “adversaries” such as China.
The White House has announced that the rule will limit the number of AI chips, called GPUs (graphics processing units), that many countries can order without a special license. Smaller orders of 1,700 GPUs will not count against the U.S. export limit About 18 of its allies, including Great Britain, the Netherlands and Taiwan, will have no restrictions.
As of 12:01:45 EST. Open market.
“The United States must act decisively to lead this transition, ensuring that American technologies are at the forefront of global AI use and that adversaries cannot easily abuse advanced artificial intelligence,” the White House said in a statement Monday.
For reference: Microsoft (MSFT:Reportedly single bought 485,000 Nvidia’s Hopper GPU In 2024, while Meta (AFTER:bought 224,000 AI chips, according to The Financial Times.
The rule aims to close loopholes in previous restrictions on AI chip exports in 2022 and 2023 by “preventing smuggling” and “raising AI security standards,” the White House said.
“These restrictions will make it even more difficult for Chinese entities to purchase the most advanced NVIDIA chips,” DA Davidson analyst Gil Luria told Yahoo Finance on Monday.
“Although there have already been some restrictions on the sale of chips, there have been reports on advanced NVIDIA chips arriving in Chinalikely due to NVIDIA having limited control over its resellers,” Luria explained in an earlier email last week.
In addition to Nvidia’s advanced chips sold through resellers, Nvidia makes special versions of the chips that comply with current U.S. trade restrictions, according to the FT, Nvidia’s H20 chips, its China Hopper chips for will not be subject to the new rule.
Ned Finkle, Nvidia’s vice president of government affairs, said in a statement Monday that the rule was “developed in secret and without adequate legislative review.”
“And by trying to falsify market outcomes and stifle competition, the source of innovation, the Biden administration’s new rule threatens to squander America’s hard-won technological advantage,” he said.
Companies have A longer-than-usual 120-day period to comment on restrictionsBloomberg reports, giving the Trump administration time to make changes to the regulation, which will take effect in a year. Nvidia’s announcement included an apparent appeal to the incoming administration.
“As the first Trump administration has shown, America wins by innovating, competing and sharing our technology with the world, not retreating behind a wall of government dominance,” Finkle said leadership, strengthen our economy and maintain our competitive advantage in artificial intelligence and beyond.”
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