Trump Administration Set to Scrap Biden’s AI Chip Export Rule – Markets React Swiftly

On Wednesday, Nvidia shares surged 3.1% to a new high following a Bloomberg report that the Trump administration is set to cancel AI chip export restrictions originally enacted under President Biden. The move halts the implementation of the so-called “AI Diffusion Rule,” a complex regulatory framework that was scheduled to take effect on May 15.

According to the U.S. Commerce Department, Biden’s rule was “overly complex, overly bureaucratic, and stifling to American innovation.” The department added that a simpler replacement will “unleash U.S. innovation and secure global AI dominance with American-made technology.”

Chip Stocks Rally – AMD, Intel, and Others Climb

AMD shares also jumped 1.8% on the news, while other chipmakers including Intel, Broadcom, NXP, and KLA saw gains. Some of those gains were pared in after-hours trading. The policy change is unfolding as President Trump prepares for a diplomatic visit to the Middle East, where nations like Saudi Arabia and the UAE have expressed frustration over restricted access to advanced U.S. chips.

Biden’s Rule: Tiered Risk System Meant to Restrict Indirect Exports to China

The AI Diffusion Rule, introduced in January, divided countries into risk tiers. High-risk nations required U.S. licenses to import more than 50,000 GPUs. The aim was to prevent AI chip smuggling into China via third-party countries like Malaysia or Vietnam.

Tech giants, including Nvidia and AMD, pushed back. AMD CEO Lisa Su emphasized the need for balance between national security and innovation. Nvidia’s CEO Jensen Huang called the export limits “a massive loss” if they isolate the U.S. from Chinese AI markets.

Relief or Shift in Strategy? Analysts Warn of Hidden Complexity

While the market initially welcomed the rollback, some analysts warn it may not mean true deregulation. Reuters reported that the Trump administration is considering a global licensing regime that may be more stringent than Biden’s, involving direct government-to-government agreements.

TD Cowen also warned that new semiconductor tariffs—up to 25%—could be introduced as early as July. Since many chips enter the U.S. embedded in finished goods like smartphones and servers, the logistics and enforcement of such tariffs remain unclear.

Conclusion

The global semiconductor industry is back at the center of U.S. trade policy. Nvidia and AMD are gaining ground following the rollback of export rules, but the road ahead remains uncertain. The market is watching closely: innovation thrives on clarity—and regulation, when blurred, becomes the next big risk.