Biden's New 'AI Diffusion' Rules Limit AI Chip Exports; Nvidia Stock Falls Amid Criticism

Jan 14, 2025, 02:42 AM

In the final days of his administration, President Joe Biden has unveiled sweeping new "AI Diffusion" export controls on artificial intelligence (AI) chips and technology, aimed at restricting China's access to advanced AI capabilities. The 200+ page regulations divide countries into three tiers, granting unrestricted access to 18 key allies, including Japan, the United Kingdom, and the Netherlands, while imposing quotas or complete bans on others. The restrictions limit the amount of AI chips, such as GPUs, that can be exported to most countries, affecting companies like Nvidia, AMD, and others. Nvidia has strongly criticized the new regulations, stating that they are "unprecedented and misguided" and that they "threaten to derail innovation and economic growth worldwide." In a statement, Nvidia's Vice President for Government Affairs, Ned Finkle, said, "In its last days in office, the Biden Administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review." Nvidia even praised the previous Trump Administration, noting that it laid the foundation for America's current strength in AI. Following the announcement, Nvidia's stock fell nearly 2%. China has condemned the new restrictions, with the Foreign Ministry stating that the move raises concerns of a "new tech cold war." The China Semiconductor Association warned that the U.S. export controls on AI would "destroy the global ecology of the AI industry" and called on the global tech industry to resist what it described as the Biden administration's "technological hegemony." European Union officials have also expressed concerns over the U.S. move, stating that limiting exports of AI chips to certain European countries could harm international cooperation. The new rules are seen as part of a broader effort by the U.S. to maintain its dominance in AI technology and prevent adversaries from gaining access to cutting-edge capabilities that could be used for military advancements.