TLDR:
- Trump administration plans to end Biden’s AI chip export restrictions that were set to begin May 15
- Nvidia shares rose 1.9% to $119.25 in premarket trading
- AMD gained 1.3% and Broadcom rose 1.9% in premarket trading
- The canceled “AI diffusion” rules could have reduced the long-term AI chip market by up to 10%
- Nvidia welcomed the decision, saying it creates a “once-in-a-generation opportunity” for American leadership
Chip stocks jumped on Thursday as the Trump administration announced plans to scrap regulations that would have limited exports of artificial-intelligence chips worldwide. The move represents a major policy shift that could boost American semiconductor companies.
Nvidia led the pack with shares climbing 1.9% to $119.25 in premarket trading. Other chip makers also saw gains, with Advanced Micro Devices up 1.3% and Broadcom rising 1.9%.
The Commerce Department confirmed Wednesday it doesn’t intend to implement AI processor restrictions that were drawn up under the Biden administration. These rules, known as “AI diffusion” regulations, were scheduled to take effect on May 15.
The canceled restrictions would have limited chip sales more widely than existing sanctions that target just China. According to analysts at BofA Securities, these rules could have reduced the long-term market for AI chips by as much as 10%.
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Impact on American Technology Leadership
Nvidia quickly praised the decision. “We welcome the administration’s leadership and new direction on AI policy,” a company spokesperson said in a statement.
The spokesperson added that with the AI Diffusion Rule revoked, “America will have a once-in-a-generation opportunity to lead the next industrial revolution and create high-paying U.S. jobs, build new U.S.-supplied infrastructure, and alleviate the trade deficit.”
The Trump administration criticized the Biden-era regulations as being overly complex and bureaucratic. A Department of Commerce spokesperson stated the rules “would stymie American innovation.”
Instead, the administration plans to replace it with “a much simpler rule that unleashes American innovation and ensures American AI dominance,” according to the Commerce Department.
Industry Response and Market Implications
The scrapped rules had organized countries into three different tiers, each with varying restrictions on whether advanced AI chips could be shipped without a license.
Leading chip companies had been vocal in their opposition to these regulations. AMD CEO Lisa Su told CNBC on Wednesday that the U.S. should strike a balance between restricting access for national security and providing market access to boost the American chip industry.
Nvidia’s CEO Jensen Huang had previously warned that being locked out of the Chinese AI market would be a “tremendous loss” for American companies.
The news comes just a week after Huang appeared alongside President Trump at the White House on April 30 to discuss American investment.
For Nvidia, whose chips are the favored choice for training artificial-intelligence models, the policy reversal could mean expanded access to global markets.
The administration’s decision reflects a shift toward prioritizing American technological leadership and economic growth in the AI sector.
Chip companies have argued that overly restrictive export controls could ultimately harm U.S. competitiveness by limiting revenue that funds research and development of next-generation technologies.
Trading in semiconductor stocks has been volatile in recent months as investors weighed the potential impact of export controls against the massive demand for AI computing resources.
The Commerce Department plans to release more details about its replacement policies in the coming weeks.
Analysts suggest this policy shift could strengthen the position of American chip makers in the global AI race, particularly against competitors in Asia and Europe.
The reversal comes at a time when demand for AI chips continues to grow exponentially, driven by the rapid adoption of large language models and generative AI applications across industries.
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