The Trump administration is preparing to rescind the Biden-era AI chip export rule before it takes effect on May 15, Bloomberg report. The decision comes after heavy pushback from Nvidia ($NVDA), global tech companies, and foreign governments like the United Arab Emirates and Saudi Arabia, which have criticised U.S. restrictions on accessing advanced AI chips.
The Biden rule, called the Framework for Artificial Intelligence Diffusion, split the world into tiers:
- Tier 1 (e.g., U.S. allies + Taiwan) → unlimited chip access
- Tier 2 (120 countries) → capped chip access
- Tier 3 (China, Russia, Iran, North Korea) → blocked
- Trump officials say the Biden approach is “overly complex, bureaucratic, and unenforceable.”
- The Commerce Department plans to replace it with a simpler global licensing system and direct government-to-government agreements to control AI chip exports.
Market impact: Shares of $NVDA (Nvidia) rose 3% after the news, as relaxed export rules could boost sales to more foreign buyers. However, Nvidia dipped 0.7% in after-hours trading as uncertainty remains over the final rule details.
The Biden-era rule was designed to block China’s access to cutting-edge AI chips, citing national security concerns. Trump’s reversal signals a shift toward unlocking U.S. innovation and expanding global sales, even as trade tensions and security worries continue.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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