TLDR:
- Nvidia stock fell 2% after Biden administration announced new AI chip export restrictions, capping GPU shipments to most countries except 18 key allies
- The rule sets a compute capacity limit of 790 transistors per square millimeter, equivalent to about 50,000 Nvidia Hopper chips
- China, North Korea, and Russia face complete bans, while countries like Switzerland and Israel face caps
- Nvidia criticized the rule as “government overreach” drafted without proper review, with VP Ned Finkle suggesting it threatens American leadership
- The restrictions could impact Nvidia’s revenue significantly, as about 56% of its revenue comes from outside the US, with China accounting for 17%
New US export controls on artificial intelligence chips sent Nvidia’s stock down nearly 2% on Monday, as the Biden administration moved to tighten restrictions on the flow of advanced semiconductors to most countries worldwide.
The White House announced updated rules that will cap GPU shipments based on their total computing power, measured by transistor density. Under the new policy, exports to most countries will be limited to chips with a compute capacity of 790 transistors per square millimeter.
This cap translates to approximately 50,000 Nvidia Hopper chips or 20,000 of its newest Blackwell chips, according to Bernstein analyst Stacy Rasgon. For context, Microsoft alone purchased 485,000 Hopper GPUs in 2024, while Meta acquired 224,000 units.

The restrictions create three distinct categories of countries. A group of 18 key US allies, including the UK, Netherlands, and Taiwan, will face no limitations. Meanwhile, 24 countries subject to arms controls, such as China, North Korea, and Russia, remain under a complete ban for receiving advanced AI chips.
All other countries, including US allies like Switzerland and Israel, will need special licenses for large orders exceeding 1,700 GPUs. Small orders below this threshold won’t count toward the export cap.
The move aims to close loopholes in previous export controls from 2022 and 2023. Reports had emerged of advanced Nvidia chips reaching restricted markets through resellers, highlighting enforcement challenges in the existing framework.
Nvidia’s specially designed H20 chips for the Chinese market should remain unaffected by these controls, according to Bernstein’s analysis. These chips were already modified to comply with earlier trade restrictions.
The rules sparked immediate criticism from industry players. Nvidia vice president Ned Finkle argued the restrictions were drafted without proper legislative review and could harm American technological advantages. The Semiconductor Industry Association expressed disappointment over the timing, noting the policy shift comes just days before a presidential transition.
For Nvidia, the impact could be substantial. Company filings show that 56% of its revenue comes from customers outside the United States, with China accounting for 17% of sales.
Bank of America analyst Vivek Arya maintained a Buy rating on Nvidia stock but acknowledged the tougher rules “muddy the waters” for the company. Citi analyst Atif Malik pointed to potential risks for Nvidia’s data center GPU sales, which represent most of its revenue.
The new restrictions appear to favor major cloud providers. Microsoft, Google, and Amazon can apply for exemptions to bypass licensing requirements when establishing data centers in affected countries, potentially increasing their market influence in AI development.
HSBC added pressure by lowering its price target on Nvidia shares to $185 from $195, citing supply chain concerns around the new Blackwell chips through early fiscal year 2026.
Companies have 120 days to comment on the restrictions, which take effect in one year. This timeline allows the incoming Trump administration to potentially modify the rules, though analysts expect the broad approach toward technology exports to remain similar.
The stock’s decline on Monday extended its losses from Friday, when shares dropped 3% in anticipation of the updated controls. Nvidia is now down about 9% over the past five trading sessions.
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