The Biden administration’s newly announced export controls on advanced artificial intelligence (AI) chips have been met with strong opposition from industry leader NVIDIA. On the 13th local time, the Biden administration revealed a new export control policy allowing the sale of semiconductors needed for AI development to around 20 allied and partner countries without restrictions, while setting limits for most other countries. These controls aim to block the direct export of AI chips to China and prevent China from boosting its AI capabilities by setting up data centers in third countries, such as Southeast Asia and the Middle East, or importing U.S.-made AI chips through other countries.
NVIDIA has strongly criticized these measures. NVIDIA’s Vice President Ned Finkle argued that these export restrictions would “hinder global innovation and economic growth and weaken America’s leadership.” Finkle also claimed that imposing bureaucratic controls on the way America’s leading semiconductors, computers, systems, and even software are designed and sold on the global market could undermine the U.S.’s leading role in the AI sector. NVIDIA generates approximately 56% of its revenue from customers outside the U.S., with around 17% coming from sales in China.
Dan Coatsworth, an analyst at AJ Bell, commented that by significantly restricting access to advanced chips, the U.S. is effectively demonstrating its dominance to the world. However, he noted that the earnings potential of many American companies, including NVIDIA, could be diminished.
The future of this export control remains uncertain. The restrictions are set to take effect 120 days after the announcement, and it is unclear how the incoming Donald Trump administration, which takes office on the 20th, will respond. Reuters reported that while both administrations share similar views on the threat posed by China, some speculate that President-elect Trump may be more proactive in negotiating with individual companies and countries.
Meanwhile, Reuters also noted that the export controls may allow major cloud service providers like Amazon, Microsoft, and Google to establish data centers in countries affected by U.S. AI chip import restrictions through license waivers, potentially increasing their market share.