Investing.com -- Shares of Nvidia (NASDAQ:NVDA) edged lower, but remained higher by 0.5% as the market responded to a report from Reuters that Trump administration officials are considering changes to a Biden-era AI chip export rule. The potential revision could impact how advanced semiconductors are distributed globally, stirring a cautious reaction among investors.
The current regulation, introduced by the U.S. Department of Commerce in January, categorizes countries into three tiers, determining their access to cutting-edge AI chips. The rule aims to maintain the most sophisticated computing power within the United States and amongst its allies, while restricting access to nations such as China and Russia. The regulation is set to take effect on May 15, requiring compliance from companies like Nvidia.
However, Trump officials are now debating the removal of this tiered system in favor of a global licensing regime that could involve government-to-government agreements. This approach aligns with President Donald Trump’s trade strategy, which emphasizes bilateral deals and could leverage access to U.S.-designed chips in negotiations.
The proposed changes also include lowering the threshold for licensing exceptions. Presently, orders below approximately 1,700 of Nvidia’s H100 chips are exempt from country caps and do not necessitate a license, only notification to the government. The Trump administration is contemplating reducing this cutoff to orders under 500 H100 chips.
These potential policy shifts have brought uncertainty to the semiconductor industry, which has previously expressed concerns over the rule’s implications. Critics argue that the restrictions could drive countries, particularly those in the second tier, to seek alternatives from China, which offers less regulated and more affordable options.
The review of the AI chip export rule comes at a time when the geopolitical landscape and trade relations are particularly sensitive. The outcome of these discussions could have significant ramifications for Nvidia and the broader semiconductor sector, as access to advanced chips is a crucial component of technological development and national security strategies.