US withdraws proposed AI chip export rules, easing sector uncertainty
Commerce Department pulls draft regulations that would have required government approval for global AI accelerator sales
The US Commerce Department has withdrawn a proposed rule that would have imposed sweeping restrictions on exports of artificial intelligence chips, removing a significant regulatory overhang for semiconductor manufacturers including NVIDIA and AMD.
The draft regulations, titled "AI Action Plan Implementation," would have required foreign buyers to secure US government approval for purchases of advanced AI accelerators and tied access to commitments such as investing in American AI infrastructure. The proposal was posted to the Office of Information and Regulatory Affairs website on February 26 before being removed without explanation earlier this week.
"The US Commerce Department withdrew a proposed rule on AI chip exports, leaving a gap in policy as China ramps up semiconductor production," Benzinga reported.
NVIDIA shares fell 1.6% to $180.25, while AMD declined 2.2% to $193.39 in Thursday trading, despite the removal of regulatory uncertainty. Both companies have seen their shares surge over the past year amid booming demand for AI data center chips, with NVIDIA up more than 50% and AMD gaining 150% over the past 12 months.
The withdrawal represents a shift in approach from the prior administration's "AI diffusion rules," which the current Commerce Department described as "burdensome, overreaching, and disastrous." However, officials have indicated they will pursue a different regulatory framework rather than reverting to previous policies.
Discussions for new measures are ongoing, including potential requirements for foreign nations to invest in US AI data centers or provide security guarantees as conditions for receiving large chip shipments. The proposed rules could establish a tiered licensing system based on deployment size.
The policy uncertainty comes as Chinese semiconductor manufacturers accelerate domestic production capabilities, raising competitive concerns for US chipmakers that currently dominate the AI accelerator market. NVIDIA controls roughly 80% of the market for data center AI chips, while AMD has been gaining share with its MI300 series accelerators.
Analysts at Morgan Stanley noted that while the withdrawal of the draft rule removes immediate operational constraints, "the lack of clear export policy creates ongoing uncertainty for international sales forecasts." NVIDIA's $4.45 trillion market capitalization and AMD's $322 billion valuation reflect investor expectations for continued AI-driven growth, though both companies face risks from potential future restrictions.
The Commerce Department has not provided a timeline for announcing new export control measures. The semiconductor industry, which generated $215.9 billion in revenue for NVIDIA over the trailing 12 months and $34.6 billion for AMD, is closely monitoring developments that could affect access to international markets.