This morning, the Biden Administration dropped a last-minute bombshell on companies at the core of the AI boom: a proposed set of sweeping new rules governing the export of cutting-edge AI chips. The rules also cover the transfer of proprietary model "weights"—often seen as the "brains" of today's sophisticated generative AI models—to customers in other countries.
The new rules impose strict limitations on the global flow of AI chips and models, dividing countries into three distinct groups. The United States and 18 of its closest allies—such as Britain, Canada, Germany, Japan, South Korea, and Taiwan—are exempt from any restrictions. Nations already under U.S. restrictions on the technology transfers remain subject to existing AI chip purchase bans, including China and Russia.
The big change, however, concerns the rest of the world, which placed in a third category that faces caps on the number of AI chips they can import. These caps can be negotiated upward through special agreements with the U.S. government, but the restrictions extend even to close U.S. trading partners and allies like Mexico, Switzerland, Poland, and Israel.
This strategy is designed to prevent China from accessing advanced AI technologies via third-party countries. But AI chip leaders, most notably Nvidia, which boasts over 80% of the market for the graphics processing units (GPUs), the specialized chips that are at the heart of the AI boom, are not happy. (Along with Nvidia, other AI-related stocks, such as Palantir and Super Micro Computer, fell today in response to the White House's announcement.)
In an unusually blunt blog post criticizing the proposed new rules, Ned Finkle, Nvidia's vice president of government affairs, called them “misguided” and “sweeping overreach,” saying that “in its last days in office, the Biden Administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review.”
The blog post was equally effusive in its praise of Trump, claiming that the first Trump Administration “laid the foundation for America’s current strength and success in AI, fostering an environment where U.S. industry could compete and win on merit without compromising national security.” It also painted an hopeful picture of the new Trump administration: “We look forward to a return to policies that strengthen American leadership, bolster our economy and preserve our competitive edge in AI and beyond.”
The blog marks a distinct departure from the circumspect approach to political statements Nvidia took during last year's presidential election campaign and a long-standing hesitancy to directly voice positions on Washington policy debates, with the company frequently choosing to advocate for policies through wider industry trade associations instead.
Nvidia CEO Jensen Huang has typically stayed out of politics
Nvidia CEO Jensen Huang carefully stayed out of most political chatter in the 2024 US presidential election cycle. He did not endorse either candidate, and even after Donald Trump won a second term Huang seemed to walk a fine line: In a January 2025 interview he said he “would be delighted” if he received an invitation to visit President-Elect Trump at his Mar-A-Lago resort in Palm Beach, Florida, but he also held back in early December from criticizing the Biden Administration’s newly-announced export controls on chip-manufacturing equipment and software.
“Interactions with the administration have been great,” Huang told Wired during an interview in front of a San Francisco audience when asked about the impact of the restrictions on Nvidia. The mild answer elicited laughter from the crowd.
It is clearly a new policy-focused era for Nvidia, which before 2023 had little to say publicly on political matters. The company traditionally spent little on direct lobbying in Washington compared to many of its peers. In 2022, the company spent just $90,000 on lobbying efforts in D.C., according to data from Open Secrets, an organization which tracks corporate lobbying.
But since Nvidia's stock began its meteoric rise in the spring of 2023, fueled by the generative AI boom, Huang and the company he founded three decades ago have increasingly positioned themselves at the center of the AI policy and political debate. The company's lobbying spend in 2023 climbed to $500,000, according to Open Secrets data.
Few issues could slow Nvidia down like the current debate around how to keep China from accessing the most cutting-edge AI chips and models. Those models depend on access to thousands or even tens of thousands of chips designed to handle AI workloads. Nvidia's GPUs are seen as the market leaders in that category.
Nvidia is currently allowed to sell AI chips to China, but they are modified, less-powereful versions for the Chinese market designed to comply with U.S. export restrictions. Since September 2022, the U.S. government has imposed strict bans on the export of Nvidia's most advanced AI chips to China.
But the new anti-China effort laid out today by the Biden Administration goes far beyond China itself, with rules designed to prevent China from acquiring the technology necessary for AI production through other countries. In July 2024, the Wall Street Journal reported on an "underground network" sneaking Nvidia chips Into China, including from third-party sellers in Singapore.
This geopolitical maneuvering aligns with U.S. efforts to establish the world’s largest datacenters within its borders or in allied nations, driven by what it views as a critical national security imperative. But it does not particularly align with Nvidia’s efforts to partner with governments around the globe, including in the Middle East -- countries like Abu Dhabi and Saudi Arabia have pumped money into their own enormous datacenter efforts in a bid to become a significant global center for AI development.
Trump may be as hawkish as Biden on AI chips
According to Nvidia’s blog post, while “cloaked in the guise of an ‘anti-China’ measure,” Biden’s rules “would do nothing to enhance US security” and “only weaken America’s global competitiveness.”
Trump, however, might prove to be just as hawkish as Biden when it comes to controlling the flow of technology to China. He may also be attracted to the idea of using export licenses for more chips as bargaining points in negotiations with "second-tier" countries over other issues and as part of trade talks.
On the other hand, even with China hawks populating Trump’s cabinet, such as CIA pick John Ratcliffe and incoming national security advisor Mike Waltz, Trump choose to revoke Biden’s last-ditch rule-setting. Because Biden promulgated the new export controls as an "interim final rule," they take effect immediately, while also kicking off a 120-day comment period after which the agency that issued the rules can adjust them if it decides, in light of the comments, that changes are warranted.
Either way, it’s clear that Nvidia has no intention of sitting on the sidelines of what has become an increasingly-intertwined technology-business-political debate. CEO Jensen Huang may show up at Mar-a-Lago sooner rather than later.
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