Nvidia and AMD Could Face Worldwide AI Chip Export Controls Imposed By the Trump Administration
Key Points
U.S. officials are considering regulations that would require government approval to ship AI chips anywhere outside the country.
The rules would establish a tiered licensing system, with a cursory review for small deployments and strict certification for large deployments.
The last round of export controls with China was costly for Nvidia, and sales to the country have yet to resume.
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Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) have been among the leading providers of the specialized processors used for artificial intelligence. These graphics processing units (GPUs) were originally designed to speed up graphics in video games -- hence the name. However, these semiconductors proved equally adept at accelerating AI processing, which sent demand for the chips soaring, due to the rising adoption of AI.
However, proposed regulations by the Trump administration could mark a major setback for the advancement of AI.
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U.S. officials are considering rules that would require Nvidia, AMD, and others to obtain government approval before shipping any AI chips outside the country, according to a report by Bloomberg. The proposed regulations would require companies to request approval from the U.S. Department of Commerce for the export of any chips designed for AI. Once the approval process was complete, licenses would be issued permitting the shipment of these AI accelerators.
The rules would go further, instituting a tiered licensing system based on the size of the deployment. Smaller shipments of 1,000 GPUs or less would be subject to a cursory review; medium-sized deployments would require preclearance before applying for a license; and sizable deployments of 200,000 GPUs or more would require certifications from government officials in the host countries. These ratifications would include strict security requirements and commitments to invest in U.S. AI.
The U.S. government already has export restrictions in place for countries it deems a threat to national security. These countries include China, Russia, North Korea, and Iran, among others. President Trump approved the shipment of AI-centric chips to China, while imposing a 25% tariff. Nvidia has been working to resume sales to the country.
Nvidia's experience in China serves as a stark reminder of what's at stake. In April of 2025, the Trump administration restricted the sale of AI chips to China to conduct a review. China retaliated by banning the use of foreign chips in government-backed data centers and requiring the use of Chinese-made processors going forward.
It's been nearly a year since the back-and-forth began, and sales of chips to China haven't yet resumed. For context, Nvidia's chip sales to China totaled $17 billion and 13% of total sales in 2024, helping to illustrate the cost of the previous round of export controls.
Last year, Nvidia generated revenue that grew 65% year over year to $216 billion, with the vast majority of those sales tied directly to AI. AMD's revenue rose 34% to $35 billion. As such, there's a lot at stake.
It's important to note that the proposed rules have not yet been finalized and may change before implementation or be scrapped altogether. That said, if these regulations are enacted, it could stunt the AI-centric growth of Nvidia, AMD, and others.
Investors will want to keep a close eye on the situation as it develops.
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Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
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