80% of the market may disappear as a result of the new export limitations on microchips that were announced on Monday, according to one of the harshest reactions.
Nvidia and other businesses will be impacted by new export limitations on artificial intelligence that the White House announced on Monday.
The limitations, which affected firms like Nvidia and Advanced Micro Devices, aligned with the predictions made by Bloomberg last week.
AMD stock AMD +0.07% dropped 1% in early trading, while Nvidia shares NVDA -2.36%, the worst-performing Dow industrials component, plunged 3%. Concerns about the number of interest rate reduction the Fed will undertake this year are also less prevalent in the larger market.
The majority of nations will be subject to restrictions on orders for powerful AI chips under the so-called interim final regulation on artificial intelligence dispersion.
In a briefing, Commerce Secretary Gina Raimondo informed reporters that the guidelines are intended to restrict rivals’ capacity to develop bioweapons, conduct nuclear simulations, and strengthen their militaries while permitting commercial use. Additionally, she pointed out that gaming chips—even ones that come close to AI chips’ capabilities—are not included in the limitations.
She claimed that the 120-day feedback period was excessively lengthy. Raimondo stated, “I fully expect that the next administration may make changes as a result of that input.”
Trump’s transition team did not answer a message.
According to the White House, 18 important allies and partners will not be affected by the limitations, including Canada, Germany, the United Kingdom, and Taiwan, which is home to Taiwan Semiconductor Manufacturing Co. (TSM -2.49%).
Although they might apply to raise their purchasing requirements, the majority of nations—including Brazil, Israel, Mexico, Singapore, and Saudi Arabia—are now on a restricted list.
According to a White House information sheet, nations that don’t will be able to purchase the equivalent of 50,000 sophisticated GPUs each.
Nvidia expressed disapproval of the regulations in a blog post.
“With a 200+ page regulatory jumble that was secretly created without adequate legislative review, the Biden Administration is attempting to weaken America’s leadership in its final days in power. According to Ned Finkle, the company’s vice president of government affairs, “this broad overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems, and even software are designed and marketed globally.”
Finkle looked to the incoming White House for support.
“The rule is already hurting American interests, even though it won’t be in effect for another 120 days. He said, “America wins through innovation, competition, and sharing our technologies with the world — not by retreating behind a wall of government overreach, as the First Trump Administration demonstrated.”
According to Ken Glueck, executive vice president of Oracle ORCL -0.45%, the regulations will cut the worldwide chip market for American companies by 80%. “Let’s be precise. “The U.S. cloud industry will be completely upended if this rule is implemented on that timeline,” he stated.
Countries may look to Chinese firms like Biren for AI chips, according to Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation. He claimed that restricting U.S. exports of AI GPUs will limit market potential for American businesses while opening the door for foreign manufacturers of AI processors.
