Biden’s AI export rules spark Nvidia’s backlash, highlighting US-China AI tug-of-war

The news: The Biden administration proposed new export rules that affect AI chip exports to 120 countries. The legislation faces strong opposition from Nvidia, which controls 90% of AI chip production. 

• The Interim Final Rule on Artificial Intelligence Diffusion would limit the sale of chips used in video games, data centers, and AI applications, ostensibly to secure national interests while fostering AI development.
• The proposed rules also set security standards to control AI model “weights” that help decide what information is critical to learning and experience—without them AI wouldn’t work.

G7 nations, Australia, Ireland, the Netherlands, New Zealand, South Korea, and Taiwan are exempt.

Politicizing AI: Nvidia says government supply regulation “threatens to derail innovation and economic growth worldwide” and would “undermine America’s leadership.” 

While the company rebuked Biden’s export rules, it also shared praise of Donald Trump’s former and future administrations, per The Verge.

“The first Trump Administration laid the foundation for America’s current strength and success in AI,” said Nvidia VP of government affairs Ned Finkle. “We look forward to a return to policies that strengthen American leadership, bolster our economy, and preserve our competitive edge in AI and beyond.” 

Bottlenecks in AI expansion: Nvidia relies heavily on international markets for its high-performance GPUs. Restrictions could limit sales in key regions, reducing revenue and stifling reinvestment in R&D.

Limiting exports could hinder collaboration with international researchers and partner companies like WPP, slowing the overall pace of AI development and potentially squandering the US’ perceived six- to 18-month advantage on AI over China, per the Associated Press.

Our take: Nvidia, the linchpin of global AI infrastructure, is ensnared in US-China geopolitical tensions and, because of its dominance in AI hardware, is now caught in the center of a tug-of-war between the current and incoming administrations. 

With a 120-day comment period, the incoming Trump administration could decide the final rules for exporting advanced computer chips. The challenge will be in balancing the US’ lead in AI with national security.

This article is part of EMARKETER’s client-only subscription Briefings—daily newsletters authored by industry analysts who are experts in marketing, advertising, media, and tech trends. To help you finish 2024 strong, and start 2025 off on the right foot, articles like this one—delivering the latest news and insights—are completely free through January 31, 2025. If you want to learn how to get insights like these delivered to your inbox every day, and get access to our data-driven forecasts, reports, and industry benchmarks, schedule a demo with our sales team.