The Trump administration is reportedly weighing rules that would require foreign buyers to obtain licenses from the U.S. government to buy American AI chips.
Why it matters: The AI chips sector has been flourishing as tech companies ramp up their spending on data centers and new AI models, underpinning the broader market.
The big picture: The draft regulations would give "Washington broad control over whether other countries can build facilities for training and running artificial-intelligence models — and under what conditions," Bloomberg reported Thursday.
- Such a requirement would add a layer of bureaucracy to foreign sales of chips from the likes of Nvidia and AMD that could slow sales or serve as the regulatory structure to expedite their export.
The impact: Nvidia and AMD shares initially fell on the news but later regained ground.
- Nvidia closed up 0.2%, while AMD closed down 1.3%.
Behind the scenes: Chipmakers have been awaiting the Trump administration's approach to exports after the White House scrapped the Biden administration's "diffusion" rule.
- AI companies and chipmakers had argued the Biden rules imposed an overly complex framework that would have made it difficult for American companies to sell abroad.
The big question: How restrictive will the new rules be?
- If the new system swiftly processes applications and awards approvals, chipmakers will likely welcome it.
- If it constricts exports or results in major applications being rejected, it could brew opposition.
What they're saying: "The Commerce Department is committed to promoting secure exports of the American tech stack," a Commerce Department spokesperson said in a statement, acknowledging "ongoing internal government discussions about formalizing that approach."
- "We will not" return to former President Biden's "burdensome, overreaching and disastrous" rule, the spokesperson added.
Representatives for Nvidia and AMD did not immediately respond to requests for comment.
Editor's note: This story has been updated with a comment from the Commerce Department.
