Investing.com -- NVIDIA (NASDAQ: NASDAQ:NVDA) shares climbed to a session high of 2.6% amid reports that the Trump administration intends to rescind Biden-era AI chip curbs, which could reshape semiconductor trade restrictions. The news, as reported by Bloomberg, indicates a potential easing of regulations that have been a point of contention among major tech firms and governments worldwide.
The anticipated policy change is part of a larger effort to reevaluate the export of chips from companies like NVIDIA. The so-called AI diffusion rule, set to take effect on May 15, will reportedly not be enforced under the current administration. The rule, introduced in the final week of President Biden’s tenure, aimed to prevent China from acquiring AI chip technology through intermediaries by creating new U.S. licensing obligations for AI chip shipments globally.
The move to lift these restrictions comes as President Trump prepares for a Middle East trip, where countries such as Saudi Arabia and the United Arab Emirates have expressed dissatisfaction with their limited ability to obtain AI chips. Trump officials are said to be formulating a new rule that would tighten control over chip exports while still promoting American innovation and dominance in AI technology.
According to a statement from the Commerce Department’s Bureau of Industry and Security, the Biden AI rule was criticized as "overly complex, overly bureaucratic, and would stymie American innovation." The department assures that while it works on a new rule, existing chip export curbs will continue to be strictly enforced. Part of the repeal strategy involves imposing chip controls on countries that have redirected chips to China, such as Malaysia and Thailand.
This development has also influenced other semiconductor stocks, with Intel (NASDAQ:INTC), NXP (NASDAQ:NXPI) Semi, KLA, Analog Devices (NASDAQ:ADI), and Broadcom (NASDAQ:AVGO) experiencing gains alongside NVIDIA. The industry is closely monitoring the situation, as the proposed changes could have significant implications for semiconductor trade and the global supply chain.