US reportedly considering sweeping new chip export controls

Trump Administration’s Potential Regulations on Semiconductor Exports

Since Donald Trump assumed office, the regulation of semiconductor exports has been a topic of uncertainty. Recent reports suggest that U.S. regulators are considering rules that would require government approval for the shipment of AI chips outside the country, giving the U.S. more control over companies like AMD and Nvidia.

In response to these reports, JS reached out to both AMD and Nvidia for comments on the matter.

The U.S. Department of Commerce stated, “The Commerce Department is committed to promoting secure exports of the American tech stack. There are ongoing discussions about formalizing this approach, but recent reports about a return to the AI diffusion rule are inaccurate. The previous regulation was deemed burdensome and overreaching.”

The proposed rules would mandate that companies and governments outside the U.S. seek approval from the U.S. Department of Commerce to purchase these chips. The review process would be based on the size and scale of the potential purchase, with larger orders requiring more extensive scrutiny.

While these rules are still in the drafting stage and subject to change, they signal a shift towards greater government oversight compared to previous regulations. The Trump administration revoked the diffusion rule introduced under President Joe Biden, indicating a move towards tighter export controls.

The Trump administration’s approach to export regulations is evident in its handling of Nvidia’s potential exports to China. The administration has oscillated on whether to permit the company to send AI chips to China, ultimately deciding to allow exports subject to U.S. Department of Commerce approval.

However, this increased oversight could have repercussions for U.S. chip companies and their global competitiveness in the AI market. If sourcing chips from the U.S. becomes more challenging, companies may seek alternatives from other countries with advancing chip technology.

Nvidia has already experienced the impact of export regulations, with Chinese customers hesitating to resume business following uncertainty over access to AI technology.