NVIDIA slams Biden for new chip rules, says measures trying to ‘preempt’ Trump

NVIDIA has spoken out against a proposed policy by the Biden administration to introduce new restrictions on exporting AI chips, calling it a hasty move that could harm the US economy and global standing. The tech giant, which dominates the AI chip market, argued that such measures would have little impact on national security while pushing other nations to develop alternative technologies.

The restrictions, expected to be announced soon, would impose tighter limits on the sale of US semiconductors, capping exports by country and company. This move is part of a long-term US effort to prevent adversaries like China and Russia from accessing cutting-edge technology. However, NVIDIA and other industry players believe the policy could backfire by stifling innovation and ceding global markets to competitors.

Concerns over economic impact

NVIDIA’s vice president of government affairs, Ned Finkle, criticised the proposed rules, arguing that targeting mainstream AI chips — used in gaming PCs and data centres worldwide—under the guise of an anti-China policy is counterproductive. He warned that the extreme country caps would disrupt the availability of standard computing technologies across the globe without meaningfully advancing national security.

The policy, which could be announced within days, is reportedly structured in tiers. US allies would retain full access to semiconductors, while most countries would face new restrictions, including caps on the computing power allowed to be exported to any single nation.

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Finkle expressed concern that this “last-minute” policy could undermine US businesses and alienate international partners. He suggested that President Biden should avoid preempting the incoming Trump administration, which is expected to take a different regulatory approach.

NVIDIA’s relationship with the incoming Trump administration

NVIDIA CEO Jensen Huang has signalled a willingness to work with President-elect Donald Trump, expressing optimism about reduced regulation under his leadership. Speaking at CES in Las Vegas, Huang said he believes Trump’s administration could foster a faster-moving tech industry by cutting back on restrictions.

Huang also stated his readiness to meet with Trump and offer assistance to ensure the administration’s success. This sentiment reflects NVIDIA’s position as a significant beneficiary of the recent AI boom, which has propelled the company to become the world’s most valuable chipmaker.

Industry pushback

NVIDIA’s criticisms are echoed by other major tech companies represented by the Information Technology Industry Council, which includes Amazon, Microsoft, and Meta. The group has voiced concerns that the proposed rules would impose arbitrary limits on US companies, reducing their ability to compete in global markets.

While the Biden administration argues that these measures aim to prevent AI from bolstering China’s military capabilities, critics say the policy risks isolating the US tech sector and driving other nations to adopt alternative technologies.

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As NVIDIA’s shares dipped slightly following the Bloomberg report on the proposed restrictions, it remains to be seen how the policy will play out in the coming weeks. With Trump set to take office soon, the tech industry is bracing for potential shifts in regulation and international trade strategy. For now, NVIDIA and its peers are advocating for a more measured approach that balances security concerns with the need to maintain global competitiveness.