US Seeks Control Over Global AI Chip Exports with New Regulations

The US government is reportedly working on draft regulations that would give it power over global artificial intelligence chip exports. According to a report from Bloomberg, citing people familiar with the matter, the proposed legislation would require semiconductor companies like Nvidia Corp. and Advanced Micro Devices Inc. to seek approval from the U.S. Commerce Department for exports of AI accelerators to any other country.

The draft rules are not intended as a means to ban exports, but rather as a way for the US government to monitor the AI industry. AI companies and governments seeking the chips would need permission from the US Commerce Department to purchase them. The approval process is likely to depend on the volume of computing power required.

The report notes that large clusters would likely require pre-clearance from the government before seeking export licenses. For instance, up to 1,000 Nvidia's latest GB300 GPU exports would have a fairly straightforward review process with some exemptions. However, higher power and larger clusters from companies would likely require stricter rules, including disclosure of business models or permitting site visits by the US.

The framework has not yet been finalized, as US officials are still providing their expertise, and the draft could change or be abandoned. The US has been in an AI race with China, seeking to overtake the Asian country and establish dominance in the space. US President Donald Trump had previously banned the sale of Nvidia's top chips to Chinese companies.

Shares of NVDA slipped nearly 2% at the time of writing, while AMD shares declined more than 3%. Other chip companies like Micron Technology and Intel shares also declined.