US eases Nvidia chip export limits but tightens pressure on China’s AI tech

The United States has abruptly reversed course on AI chip export restrictions while simultaneously targeting Chinese competitors, signaling a major policy shift that aligns with Nvidia‘s interests. This development comes as Nvidia CEO Jensen Huang joins President Trump in Saudi Arabia to court international AI investments, highlighting the growing intersection of geopolitics, corporate interests, and AI technology development in shaping global tech policy.

The big picture: The US Department of Commerce has rescinded the Biden-era AI Diffusion Rule that would have limited exports of advanced AI chips just days before it was set to take effect on May 15th.

• The rule would have imposed restrictions on how many US-made AI chips could be shipped internationally without special government approval.
• The Commerce Department criticized the rule as potentially “stifling American innovation” and “saddling companies with burdensome new regulatory requirements.”
• Officials indicated a replacement rule to protect US AI technology will be issued in the future but provided no specific timeline or details.

Why this matters: The policy reversal represents a significant win for Nvidia, which commands an estimated 90% share of the global AI chip market and had publicly opposed the restrictions.

• Nvidia had previously called the export limitations “misguided” while expressing hope for Trump’s return to policies that would “strengthen American leadership” in AI.
• The timing coincides with Nvidia CEO Jensen Huang’s appearance alongside President Trump at a US-Saudi investment summit, suggesting potential coordination between corporate and government policy.

Behind the numbers: While rescinding export controls on US chips, the administration simultaneously announced a crackdown on companies using Huawei‘s competing Ascend AI chipsets.

• The Commerce Department warned that using Huawei’s Ascend AI processors “anywhere in the world” would violate US export control agreements.
• Huawei’s home-grown chipsets are widely considered China’s most viable alternative to Nvidia’s dominant AI processors.

Reading between the lines: The dual approach of relaxing restrictions on US chip exports while targeting Chinese competitors suggests a strategy focused on maintaining American tech dominance rather than simply national security.

• The previous restrictions aimed to prevent countries like Russia and China from accessing or developing advanced AI technologies.
• The new approach appears to prioritize US market share and competitive advantage in the rapidly growing global AI sector.

What they’re saying: President Trump made clear expectations at the Saudi summit where Huang and other tech leaders were present.

• “They’re going to walk away with a lot of checks for a lot of things that you’re going to provide,” Trump told Saudi Crown Prince Mohammed bin Salman, according to The Washington Post.

Notable attendees: Despite skipping Trump’s inauguration, Huang joined other prominent tech figures at the Saudi investment summit.

• The gathering included Tesla’s Elon Musk, AMD’s Lisa Su, OpenAI’s Sam Altman, and Epic Games CEO Tim Sweeney.