Targeting artificial intelligence microchips, the Biden administration is proposing new export restrictions that could have a big effect on Advanced Micro Devices (AMD, Financials) and Nvidia (NVDA, Financials). Intended to divide countries into three tiers based on their access to sophisticated U.S. chip technology, the proposed rules aim to restrict sales in many global markets. Nvidia has already imposed restrictions on AI chip sales to China and Russia, which together account for a meager share of its global revenue.
For the sake of national security, the new approach aims to protect American technical superiority. Nvidia rejected the warning that the proposed limits could undermine America’s competitive edge in the global AI race and slow economic development. After the news, after-hours trading saw Nvidia shares fall nearly 1%.
Separately, at the CES 2025 technology conference, Nvidia CEO Jensen Huang showed off new artificial intelligence devices, including a $3,000 AI personal computer running on the Blackwell chip. However, with these advances, Nvidia’s stock fell more than 6%, suggesting that the market is concerned about the broader implications of export restrictions and the competitiveness of artificial intelligence sectors.
To address the shortage of real-world data that has become a bottleneck in the evolution of innovative technologies, Nvidia is also expanding its use of synthetic data to train artificial intelligence models. The company’s investments generating synthetic data show its attempts to maintain a competitive edge in artificial intelligence research.
As Nvidia negotiates geopolitical challenges and technological developments, the announcements coincide. Despite the obstacles, the company continues to be a major player in the global semiconductor and artificial intelligence sectors.
This article first appeared on GuruFocus.
