Trump To Revise AI Chip Curbs. What Does That Mean For Nvidia And AMD?
Mean For Nvidia And AMD?
BENJAMIN PIMENTEL
President Donald Trump plans to rescind Biden-era export cubs on AI chips, according to a report.
The news sparked a brief rally in Nvidia stock and shares of AMD, which slipped in extended trading as Wall Street continued to grapple with market uncertainty.
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Trump plans to revise semiconductor trade restrictions imposed to mitigate national security risks related to the rapid advance of AI, Bloomberg reported Wednesday, citing unnamed sources.
But shares of Nvidia (NVDA) and AMD (AMD) wavered amid heightened worries about the impact of the Trump tariffs on tech, specifically on chips.
Bernstein analyst Stacy Rasgon said the news was positive, saying that the move was "good for now" and that the reported policy change "removes some near-term uncertainty."
"But I wonder what he is cooking up to replace them with," Rasgon told Investor's Business Daily.
The move rescinds the so-called "AI diffusion rule" embraced by the Biden Administration which sought to prevent the export of high-end chips to adversarial nations, such as China and Russia. The White House plan was confirmed late Wednesday by a Department of Commerce spokesperson who told CNBC that "the Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation."
In a note to clients, Bernstein's Rasgon said the move "removes what had been a near-term overhang on the AI space (at least for now)."
But questions remain.
"We are unfortunately not so innocent as to believe the issue is put to rest," he wrote, noting how the Commerce Department spokesperson was also quoted as saying, "We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance."
"We don't know what that means, but clearly something will presumably be waiting out there to replace the rules at some point. But what?" Rasgon added.
The report comes three weeks before the much-anticipated earnings report from Nvidia. The chip behemoth's dominant position in AI has faced greater investor scrutiny amid worries about the impact of Trump's trade policy and growing competition.
Nvidia stock rallied 3.1% to close at 117.06. AMD gained 1.8% to close at 100.36. But both stocks were down a fraction in late trades.
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