Nvidia stock fell Monday after the White House announced new export restrictions on artificial intelligence processors. Industry officials criticized the last-minute regulations by the lame duck Biden Administration.
President Joe Biden is due to transfer power to President-elect Donald Trump on Jan. 20.
The Biden Administration published an interim final rule titled, "Export Control Framework for Artificial Intelligence Diffusion."
The rule places additional restrictions on the sale of AI processors and systems to safeguard national security, the White House said in a statement. It restricts where the AI processors can be sold and in what quantities.
In a blog post, Nvidia called the new restrictions "misguided."
Ned Finkle, vice president of government affairs at Nvidia, said AI adoption based on U.S. technology is fueling growth for industries at home and abroad. And that's due in part to the regulatory foundation laid by the first Trump administration, he said.
"That global progress is now in jeopardy," he said. "The Biden Administration now seeks to restrict access to mainstream computing applications with its unprecedented and misguided 'AI Diffusion' rule, which threatens to derail innovation and economic growth worldwide."
In its last days in office, the Biden administration dumped a "200-plus page regulatory morass, drafted in secret and without proper legislative review," Finkle said.
"This sweeping overreach would impose bureaucratic control over how America's leading semiconductors, computers, systems and even software are designed and marketed globally," he said. It threatens "to squander America's hard-won technological advantage."
Nvidia Stock Drops On News
On the stock market today, Nvidia stock dropped 2% to close at 133.23.
On Friday, Nvidia stock fell below its 50-day moving average line, triggering a sell signal.
The new regulations also will impact Nvidia rivals Advanced Micro Devices, Broadcom, Marvell Technology and others.
The Semiconductor Industry Association also condemned the Biden Administration's late regulatory move.
"We're deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry," SIA Chief Executive John Neuffer said in a written statement.
He added, "The new rule risks causing unintended and lasting damage to America's economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors."
Neuffer noted that several regulations already have been implemented in recent years to control and restrict access to advanced semiconductors. The new regulatory action imposes global restrictions and onerous licensing requirements on U.S. exports of AI chips, he said.
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