Nvidia’s actions fall as the Biden administration tightens the export rules of AI chips

Nvidia (NVDA) actions fell up to 3% on Monday after the Biden administration announced stricter export rules for artificial intelligence (AI) chips, particularly focused on sales to countries seen as “adversaries”, as China.

The new rules limit the advanced GPU number (graphics processing units) that can be sold to most countries without a special license. The limit is established in 50,000 units per order, while smaller shipments of up to 1,700 GPU are exempt. However, American allies such as the United Kingdom, Taiwan and the Netherlands will not face these restrictions.

The White House explained that these rules are necessary to ensure that the US leads the AI ​​technology sector while preventing rivals from easily accessing vanguard’s hardware. “The United States must act decisively to lead this transition and prevent adversaries from exploiting the advanced AI,” said the White House.

In 2024, companies such as Microsoft (MSFT) and Meta (Meta) were among the largest buyers of the powerful GPU of the Nvidia hopper, with Microsoft buying 485,000 units and finish buying 224,000. Updated export rules aim to close gaps in previous regulations that allowed smuggling or non -compliant sales, particularly to China.

Da Davidson’s analyst Gil Luria stressed that these rules will make Chinese companies acquire advanced Nvidia chips. He explained: “While the restrictions were already in place, there have been reports of Nvidia chips that arrive in China due to bad control over the resellers.”

Nvidia, however, points out that it makes modified versions of its chips to comply with the current regulations of the United States. For example, NVIDIA H20 chips, designed for the Chinese market, will not be affected by the new rules.

In response, the Vice President of Government Affairs of NVIDIA, Ned Finkle, criticized the lack of transparency and adequate review in the rules of elaboration. He warned that these restrictions could damage the technological sector of the United States. “This rule threatens to undermine the technological leadership and innovation of the United States,” Finkle said.

The new rules will be open for public feedback for 120 days before entering into force in a year, allowing time for possible adjustments under incoming administration. The Nvidia declaration also pointed out a preference for policies that promote innovation and competition. “We expect a return to policies that strengthen US leadership in AI,” Finkle added.

Despite the regulatory changes, some analysts remain optimistic about the future of Nvidia. Bank of America analyst Vivek Arya, reaffirmed his “purchase” qualification for actions, although he pointed out that the new export restrictions could complicate Nvidia’s perspective. Citi Malik Atif analyst also pointed out that the export limit could damage GPU sales from the Nvidia Data Center, which constitute a large part of its income.

Nvidia’s actions continued their decrease on Monday, falling 3%, after a 3% drop on Friday in anticipation of the new regulations. During the past week, Nvidia shares have fallen by approximately 9%.

In addition, HSBC reduced its target price for NVIDIA from $ 195 to $ 185, citing concerns about the problems of the supply chain related to the Blackwell project, which could affect NVIDIA’s performance in mid -2026.

The Semiconductor Industry Association (SIA) expressed dissatisfaction with the speed with which the new export rule was introduced, without sufficient industry consultation. “This important policy change should not hurry without significant contributions,” said the SIA.

The news also affected the PHLX (^Sox) semiconductor index, with Nvidia competitors such as Advanced Micro Devices (AMD) and Qualcomm (Qcom) that experience slight falls, while Broadcom (Avgo) saw a small increase.

Also read: 3 high growth technological actions that could overcome cryptocurrencies