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WATCH: US Proposes Rule Requiring Licenses for AI Chip Exports <\/p>\n(Bloomberg) — Nvidia Corp. has long been the world\u2019s AI kingmaker. Now, the Trump administration is considering taking a formal role in the industry that would include similarly sweeping powers.<\/p>\n
Officials at the US Commerce Department have written draft regulations that would restrict AI chip shipments to anywhere in the world without American approval,\u00a0giving Washington broad control over whether other countries can build facilities for training and running artificial-intelligence models \u2014\u00a0and under what conditions.<\/p>\n
Most Read from Bloomberg<\/p>\n
The proposed rule\u00a0\u2014 which could change substantially or be shelved entirely \u2014 would require companies to seek US permission for virtually all exports of AI accelerators from the likes of Nvidia and Advanced Micro Devices Inc., a global expansion of curbs that currently cover around 40 countries, according to people familiar with the matter.\u00a0These chips are the most coveted components in the tech world. Companies like OpenAI and\u00a0Alphabet Inc. buy them by\u00a0the thousands to install in\u00a0data centers that run services like ChatGPT and Gemini.<\/p>\n
Shares of Nvidia and AMD fell to session lows on the news Thursday. Nvidia dropped as much as 1.9%, while AMD declined 2.3%.<\/p>\n
WATCH: US Proposes Rule Requiring Licenses for AI Chip Exports <\/p>\n
President Donald Trump\u2019s team has said repeatedly that they want the world to use American AI, and the Commerce Department\u2019s draft rule isn\u2019t meant to function as an Nvidia\u00a0export ban. Rather, the regulations would set up the US government as gatekeeper for the AI industry: Companies\u00a0\u2014 and in some cases, their governments \u2014 would have to seek Washington\u2019s blessing\u00a0to buy the precious accelerators.\u00a0How Trump\u2019s team decides to dole out those licenses would then determine whether countries are able to build critical digital infrastructure, technology that many world leaders see as key to economic growth, corporate competitiveness and military sovereignty.<\/p>\n
The specific approval process\u00a0would depend\u00a0on how much computing power a company wants, said the people, who asked not to be named discussing an ongoing policy debate.\u00a0Shipments of up to 1,000 of Nvidia\u2019s latest GB300 graphics processing units, or GPUs, would\u00a0undergo a fairly simple review with certain exemption opportunities. Companies building\u00a0bigger clusters would need\u00a0preclearance before seeking export licenses. They could face conditions such as disclosing their business models or allowing the US government site visits, depending on the specifics of the data centers in question.<\/p>\n
For truly\u00a0massive deployments \u2014 more than 200,000 of Nvidia\u2019s GB300 GPUs owned by one company,\u00a0in one country \u2014 the host government would have to get involved. The US would only approve such exports to allies that make stringent security promises and \u201cmatching\u201d investments in American AI, the people said, noting that the draft rule doesn\u2019t specify an investment ratio. For context, 200,000 GB300s\u00a0is the number that NScale,\u00a0a UK company that specializes in renting AI chips to third parties,\u00a0is planning to provide to Microsoft Corp. across four sites in the US and Europe. The firm described\u00a0this deal as\u00a0\u201cone of the largest AI infrastructure contracts ever signed.\u201d<\/p>\n
Nvidia, AMD and the Commerce Department\u2019s Bureau of Industry and Security, which is responsible for semiconductor export controls, didn\u2019t respond to requests for\u00a0comment.<\/p>\n
The Commerce Department later said in a social media post that\u00a0the agency \u201cis committed to promoting secure exports of the American tech stack. We successfully advanced exports through our historic Middle East agreements, and there are ongoing internal government discussions about formalizing that approach.\u201d That\u2019s a reference to last year\u2019s AI chip deals\u00a0with the United Arab Emirates and Saudi Arabia, both of which have been subject to license requirements for accelerator shipments since 2023.<\/p>\n
The agency\u2019s framework\u00a0is far from finalized, the people familiar with the situation emphasized, and officials from across the federal government are currently providing their input.\u00a0Axios\u00a0quoted a White House official as saying that the Commerce Department\u2019s rule as drafted \u201cdoes not reflect what President Trump has said on export controls nor does it reflect the direction of the Trump administration on encouraging export of the American AI stack.\u201d Trump\u2019s team is standing up several\u00a0initiatives to\u00a0promote American AI exports, especially in the Global South.<\/p>\n
Still, the proposed regulations mark\u00a0the administration\u2019s\u00a0most substantive step toward a global chip export strategy since\u00a0scrapping\u00a0President Joe Biden\u2019s approach in May, at which time they promised a replacement rule \u201cin the future.\u201d Trump officials have derided the previous administration\u2019s so-called AI diffusion rule, which controlled AI chip sales to most countries and set caps on how much could be exported, as stifling American tech dominance. The Commerce Department reiterated that sentiment in its Thursday post, saying that \u201cwe will not\u201d return to the AI diffusion framework, which it called \u201cburdensome, overreaching and disastrous.\u201d<\/p>\n
Whether Trump\u2019s approach ultimately proves more or less restrictive would be a function of how officials use the worldwide license requirements they are now considering.<\/p>\n
If Washington approves chip sales speedily and with few strings attached, the global AI infrastructure buildout could simply continue humming along \u2014 just with a lot more paperwork. Bureaucratic delays or drawn-out negotiations, meanwhile, would throw a wrench into project planning. It wasn\u2019t until months after the Trump administration announced its UAE chip export deal that licenses began to flow, contingent on the Gulf nation investing $1 in the US for every dollar invested at home.<\/p>\n
A big unknown is how much money\u00a0the US would expect from countries like\u00a0France or\u00a0India, which also have ambitions to build large data centers of 1 gigawatt or more. Another factor is how Trump may wield chip curbs in broader diplomatic negotiations, especially as he recalibrates his tariff strategy.\u00a0Last year, the president\u00a0threatened\u00a0semiconductor export controls\u00a0in retaliation for\u00a0digital services taxes that have been imposed in places like the European Union.<\/p>\n
\u201cWe do not really like the idea of potentially tying AI access to trade negotiations (or to any other of Trump\u2019s assorted whims), which such a move clearly opens a door to,\u201d\u00a0longtime Bernstein chip analyst Stacy Rasgon wrote of the draft rule.<\/p>\n
Also unclear is how the US will handle restrictions on model weights, which are\u00a0the\u00a0numerical parameters that AI software\u00a0uses\u00a0to process data and make\u00a0decisions\u00a0\u2014 making them among the most valuable intellectual property in the world. Biden\u2019s global chip framework included overarching restrictions on where companies could host frontier model weights, whereas Trump\u2019s approach would handle that question through individual licenses.<\/p>\n
Foreign leaders are broadly uncomfortable\u00a0subjecting their tech futures to Washington\u2019s whims. But when it comes to computing power, they have little choice. Countries can either import chips from American companies like Nvidia, the market leader by a wide margin, or Chinese firms like Huawei Technologies Co., which makes less-powerful chips in much smaller quantities but has global ambitions. And lest they consider the latter, Washington has issued a warning\u00a0that using Huawei AI accelerators anywhere in the world could violate\u00a0American trade restrictions.<\/p>\n
Read more about AI sovereignty:<\/p>\n
Europe Fights for AI Independence to Avoid Becoming a Tech \u2018Colony\u2019<\/p>\n
Korea Kicks Off AI Squid Game in Bid to Compete With US, China<\/p>\n
India Has Its Own Unique Recipe for \u2018AI Sovereignty\u2019<\/p>\n
China\u2019s AI ambitions\u00a0are a central factor behind Washington\u2019s AI policymaking. One focus is limiting China\u2019s production of AI chips, which the US has done by restricting exports of semiconductor manufacturing equipment \u2014 and, more recently under Trump, allowing Nvidia back into China to compete on Huawei\u2019s home turf. The Commerce Department\u2019s latest global proposal\u00a0wouldn\u2019t change Washington\u2019s approach to chip exports to the Asian nation, people familiar with the matter said, nor would it alter an effective ban on AI chip exports to around 20 other arms-embargoed countries.\u00a0Trump\u2019s team is currently weighing how many Nvidia chip exports to China\u00a0would be enough to dampen Huawei\u2019s rise without giving the country too much additional computing capacity.<\/p>\n
But the global framework could have significant knock-on effects for China\u2019s AI industry.\u00a0One direct consequence of the draft rule would be better US government visibility into global chip flows, which some officials have long argued is necessary to\u00a0detect semiconductor smuggling. Trump\u2019s team last year had planned chip export controls on Malaysia and Thailand to combat chip diversion to China, though\u00a0they ultimately decided against singling out individual countries as they worked on a global strategy.<\/p>\n
The US could also use\u00a0export licenses to regulate Chinese firms\u2019 access to AI chips overseas, as some national security hawks have long advocated. In select instances, they already have:\u00a0\u200b\u200bTrump\u2019s team conditioned some Nvidia shipments to the UAE\u00a0on firms not providing computing services to any Chinese AI companies, according to people familiar with the matter. It remains to be seen whether they would impose similar license terms in other regions such as Southeast Asia, where firms like Alibaba Group Holding Ltd.\u00a0rent the use of Nvidia chips they are unable to\u00a0buy themselves.<\/p>\n
–With assistance from Maggie Eastland.<\/p>\n
(Updates with analyst\u2019s comment in the 15th paragraph.)<\/p>\n
Most Read from Bloomberg Businessweek<\/p>\n
\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Nvidia Corp. has long been the world\u2019s AI kingmaker. Now, the Trump administration is considering taking…\n","protected":false},"author":2,"featured_media":315569,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[365,67539,5306,363,364,902,10126,111,139,1042,69,145,2179,2988],"class_list":["post-315568","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-ai-accelerators","tag-ai-infrastructure","tag-artificial-intelligence","tag-artificialintelligence","tag-bloomberg","tag-commerce-department","tag-new-zealand","tag-newzealand","tag-nvidia","tag-nz","tag-technology","tag-trump","tag-washington"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/315568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=315568"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/315568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/315569"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=315568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=315568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=315568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}