President Joe Biden has announced a final round of export restrictions on AI chips manufactured by Nvidia and AMD, specifically designed to limit China’s and Russia’s access to advanced semiconductors used for training artificial intelligence models and powering data centers. The White House revealed on Monday that chip sales to 18 US allies would remain unrestricted, while controls would not apply to chip orders below certain computational thresholds.
The proposed regulations aim to help businesses worldwide align with American standards and are scheduled to take effect 120 days from publication. Under these restrictions, entities outside close US allies would still be permitted to purchase up to the equivalent of 50,000 advanced graphics processing units (GPUs) per country.
Nvidia has strongly criticized the plan in a blog post published Monday. Ned Finkle, the company’s vice president of government affairs, called the rules “unprecedented and misguided,” arguing they “threaten to derail innovation and economic growth worldwide.” Finkle contended that while presented as an “anti-China” measure, the rules would do nothing to enhance US security and would control technology already widely available in mainstream gaming PCs and consumer hardware.
The financial impact on Nvidia is significant, as revenue from China and Hong Kong represented 15% of the company’s sales, totaling $5.4 billion in the three months ending October 27. The US generated the bulk of Nvidia’s business at 42% that quarter.
This framework builds upon existing US curbs designed to prevent adversary nations from using advanced AI to modernize their militaries. In November 2023, the US Department of Commerce implemented the Advanced Computing Chips Rule, which restricts Nvidia and others to selling only less-powerful chip versions in China. However, a New York Times investigation in August revealed that a network of companies had found workarounds, selling Nvidia’s most advanced chips to state-affiliated groups in China.
The Biden administration has simultaneously supported the domestic chip industry with tax breaks and subsidies, providing American chipmakers with nearly $30 billion in subsidies through the 2022 CHIPS Act, a $280 billion package supporting semiconductor innovation. Intel, Micron, AMD, and Microchip Technology are among the direct beneficiaries. President-elect Donald Trump has criticized the CHIPS Act, advocating for tariffs instead to motivate overseas chipmakers to build more US factories.
Key Quotes
While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance US security. The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware.
Ned Finkle, Nvidia’s vice president of government affairs, strongly criticized the Biden administration’s proposed export restrictions, arguing they would harm global innovation without providing meaningful security benefits.
unprecedented and misguided… threaten to derail innovation and economic growth worldwide
Finkle’s characterization of the export controls reflects Nvidia’s concern about the broad impact of these restrictions on the global AI ecosystem and the company’s significant revenue from Chinese markets.
Our Take
These export controls represent a defining moment in AI geopolitics, establishing semiconductors as the chokepoint for controlling AI development globally. While the Biden administration frames this as national security, Nvidia’s fierce opposition highlights the tension between security imperatives and commercial interests. The $5.4 billion at stake for Nvidia in Chinese markets is substantial, but the strategic implications are even larger. By limiting access to advanced AI chips, the US is essentially attempting to maintain technological superiority in AI development. However, history suggests such restrictions often accelerate domestic innovation in restricted countries—China may intensify efforts to develop indigenous chip capabilities. The 50,000 GPU threshold creates an interesting middle ground, allowing some AI development while preventing the massive compute clusters needed for frontier model training. This policy will likely define AI development trajectories for the next decade, potentially creating parallel AI ecosystems with different capabilities and standards.
Why This Matters
This development represents a critical escalation in the US-China technology competition, particularly in the AI sector where semiconductor access is fundamental to developing advanced capabilities. The restrictions directly impact the global AI supply chain and could reshape how countries access cutting-edge AI infrastructure.
For the AI industry, these controls create a bifurcated market where innovation may develop along different trajectories in allied versus non-allied nations. Companies like Nvidia face the challenge of balancing national security requirements with their business interests in major markets like China, which represents billions in revenue.
The broader implications extend to global AI development, as limiting access to advanced chips could slow AI progress in restricted countries while potentially accelerating domestic innovation in allied nations. This policy also signals that AI technology is increasingly viewed through a national security lens, with semiconductors recognized as strategic assets crucial to military and economic competitiveness. The 120-day implementation timeline creates uncertainty for businesses planning AI infrastructure investments, while the exemptions for allies suggest a strategy of building a coalition around American technological standards.
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Source: https://www.businessinsider.com/biden-white-house-new-chip-export-controls-nvidia-china-2025-1