Nvidia (NVDA) shares rose Thursday after Bloomberg reported that the Trump administration plans to repeal AI chip export restrictions implemented by former President Joe Biden.
Shares of the AI chipmaking giant rose nearly 2% in premarket trading and closed up 3% on Wednesday following the news. Shares of rival AMD also rose about 2%.
The U.S. Department of Commerce confirmed the regulatory shift in a statement to Reuters and Axios, calling Biden’s AI rule “overly complex” and “overly bureaucratic.”
“We will replace it with a simpler rule that will unleash American innovation and ensure American dominance in AI,” a spokesperson said.
The department did not immediately respond to Yahoo Finance’s questions about what specific changes would be made to the previous policy.
The Biden-era rule, known as the “AI proliferation rule,” uses a tiered system to limit the number of AI chips that can be exported to major U.S. trading partners, aimed at stopping chips from being smuggled into China through other countries. The rule also significantly limits the ability of U.S. companies to expand AI data center capacity overseas.
The AI proliferation rules were passed by Biden in January and were originally scheduled to take effect in May. According to Bloomberg, citing anonymous sources, President Trump will not implement the policy.
Large technology companies including Nvidia have called on Trump to repeal the AI proliferation rules, with Ned Finkle, the chipmaker’s vice president of government affairs, calling it an attempt to “manipulate market outcomes and stifle competition.”
Therefore, Wednesday’s news brought a breather for Nvidia and AMD, after Trump’s other trade policies caused the two companies’ stock prices to fall by about 13% and 17% respectively in 2025. The two companies’ stock prices fell sharply, including losses after Trump banned the two companies from exporting AI chips to China.
However, Trump’s planned changes to the AI proliferation rules will not necessarily be a panacea for chip companies.
According to Reuters, Trump administration officials are considering establishing a global licensing system for chip exports through an intergovernmental agreement. Citi analyst Atif Malik said in his analysis that the system “may be more stringent than Biden’s system because they will put AI chips at the center of tariff negotiations.”
Other analysts have also warned that the shift in rules governing the proliferation of AI could actually make it harder for chipmakers to do business overseas.
Meanwhile, Trump is ready to impose tariffs on semiconductors, which would deal another blow to chip companies.
TD Cowen analysts said this week that the U.S. government could impose tariffs of up to 25% on semiconductors as early as July. It is unclear how those tariffs would be implemented because most chips enter the U.S. in finished form, such as in servers and smartphones.
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