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The Biden Administration's sweeping set of new rules that restrict AI chip sales to countries not aligned with US national security interests are unlikely to be watered down by the incoming Trump Administration, believes a Taiwan-based semiconductor analyst. The export control rules, which came soon after the CES conference in Las Vegas and amidst a fresh set of media reports outlining troubles with Blackwell GPU supplies, drew a sharp backlash from NVIDIA.
The company, which commands an effective monopoly over the global AI chip supply chain, called the new export control rules an attempt to "undermine" American technology leadership by placing control of semiconductor exports in bureaucratic hands.
NVIDIA Can Face Tighter GPU Restrictions During Trump Presidency, Believes Analyst
The Biden Administration's latest rules divide the countries to which NVIDIA's advanced AI GPUs can be exported into three categories. The first is a list of nations that are either aligned with US national security objectives or are not a threat to the US. These countries can secure the chips without any hindrance. The second category consists of hostile nations such as Russia and Iran, which are completely barred from procuring either US-origin GPUs or AI software.
Finally, the third category limits countries such as India from importing large amounts of GPUs without scrutiny. These nations will be able to import 1,700 GPUs without regulatory scrutiny, and they are designed to prevent the targeted countries from building large-scale data centers capable of advanced defense research.
The rules also limit key AI software parameters, such as model weights, from being disclosed to nations. NVIDIA's response to them was hard-hitting, as it characterized the rules as threatening to "to derail innovation and economic growth worldwide." NVIDIA admitted that the new rules will not come into effect until 120 days but cautioned that they were already "undercutting U.S. interests."
However, despite NVIDIA's praise of the previous Trump presidency in its comments, one analyst believes that the export rules are only set to tighten during the incoming administration. Sharing his thoughts on X, Taipei-based financial analyst Dylan Nystedt outlined several factors that make it unlikely that the issue "might go away under President Trump." He believes that the reality might be different, and "If anything, the rules are likely to become more extreme over time, not less."
He starts off by sharing comments made by TSMC's founder, Dr. Morris Chang, in 2023, where he shared his thoughts and remarked that globalization is dead. Dr. Chang had made similar remarks in 2022 and saw a media mogul agree with him. In his 2023 remarks, the former TSMC boss had also supported American policy objectives of slowing down China's progress.
Nystedt also believes that supercomputers are helping adversarial nations such as China and Russia to develop advanced military technologies. He outlined, "Supercomputers have already helped Russia and China develop hypersonic missiles, better jet planes and engines, improved nuclear modeling, more."
As a consequence, the analyst outlines that the fear among Washington policy circles is that "AI will be able to help adversaries build far better weapons than engineering and design software has already done." He also shared a highly circulated image of a purported Chinese sixth-generation fighter aircraft prototype that appears to rival Northrop Grumman's Next-Generation Air Dominance (NGAD) platform.
According to Nystedt, NVIDIA is misguided in its criticism of the US government. He concludes by outlining that "In its [NVIDIA] zeal to drive computing forward for the good of mankind, it forgot evil exists in the world."
Nvidia is unlikely to see any change to the new US export rules on ‘AI Diffusion’ unveiled Monday (1/13).
It is not an issue that might go away under President Trump.
It is a US National Security issue.
Thread 1/6 $NVDA $AMD $INTC $TSM $HXSCL $MU $SSNLF #semiconductors
— Dan Nystedt (@dnystedt) January 14, 2025
