The U.S. government announced on Monday it will impose stricter limits on the export of artificial intelligence chips and technologies.
The new rules aim to safeguard the U.S. and its allies’ access to advanced computing power while blocking countries like China, Russia, Iran, and North Korea.
The regulations will limit the number of AI chips that can be sent to most nations while providing unrestricted access for the U.S.’s closest allies.
“The U.S. leads AI now – both AI development and AI chip design, and it’s critical that we keep it that way,” said Commerce Secretary Gina Raimondo.
The rules, introduced during President Joe Biden’s final days in office, extend beyond China and are designed to bolster U.S. dominance in AI by tightening global controls.
The Biden administration has spent four years attempting to hinder China’s acquisition of advanced chips that could enhance its military capabilities.
The regulation, set to take effect in 120 days, gives the incoming Trump administration time to review its enforcement.
The rules place new restrictions on advanced GPUs used in AI model training, most of which are produced by Nvidia and AMD.
Nvidia’s shares fell by 5%, while AMD’s dipped by 1%.
Major cloud service providers, including Microsoft, Google, and Amazon, can apply for global authorizations to build data centers in countries restricted by chip export quotas.
To gain approval, companies must meet stringent security, reporting, and human rights standards.
The Biden administration had already imposed broad restrictions on China’s access to advanced chips, updating these controls annually.
Nvidia criticized the new regulations, calling them “sweeping overreach.”
The rules divide the world into three tiers.
Eighteen countries, such as Japan, Britain, and South Korea, are exempt.
Around 120 others, including Singapore and Israel, face caps, while arms-embargoed nations like China are entirely barred from receiving this technology.