Nvidia stock (NVDA) fell to 3% early Monday after the Biden administration Issued an updated export regulation “Adversaries” like China aim to control the flow of artificial intelligence chips.
The White House said the rule would limit the number of AI chips called GPUs (graphics processing units) that can be ordered by most countries to 50,000 without a special license. Small orders of 1,700 GPUs or less will not count towards the export cap. Some 18 US allies, including the UK, the Netherlands and Taiwan, will face no sanctions.
As of 12:05:26 PM EST. market open
The White House said in a statement on Monday, “The United States must act decisively to lead this transition by ensuring that US technology is subject to the use of global AI and countering the misuse of advanced AI with ease.” can’t.”
For reference, Microsoft (MSFT) alone allegedly has purchased 485,000 Nvidia’s Hopper GPUs In 2024, while Meta (METAAccording to the Financial Times, 224,000 AI chips have been purchased.
The White House said the rule aims to close loopholes in earlier export restrictions on AI chips in 2022 and 2023 by “preventing trafficking” and “enhancing AI security standards.”
“The ban will make it more difficult for Chinese entities to purchase the most advanced NVIDIA chips,” DA Davidson analyst Gil Luria told Yahoo Finance in an email Monday.
“While there are already some restrictions on the sale of the chip, there are Reports of advanced NVIDIA chips make it to ChinaLikely due to the fact that NVIDIA has 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 US trade restrictions on China. According to the FT, Nvidia’s H20 chips – its Hopper chips for China – Will not be subject to the new rule.
Ned Finkel, Nvidia’s vice president of government affairs, said in a statement Monday that the rule was “drafted in secrecy and without proper legislative review.”
“And by trying to stifle market outcomes and stifle competition — the lifeblood of innovation — the Biden administration’s new rule threatens to erode America’s hard-won technological advantage,” he said.
Companies have A longer than normal 120-day period for providing comments on sanctionsBloomberg reported, giving the Trump administration time to make changes to the rule, which is set to take effect in a year. Nvidia’s statement included an apparent appeal to the incoming administration.
“As the first Trump administration demonstrated, America wins through innovation, competition and by sharing our technologies with the world — not by retreating behind a wall of government overreach,” Finkel said. “We look forward to returning to policies that strengthen American leadership, strengthen our economy and preserve our competitiveness in AI and beyond.”
