The Biden administration's plan to impose further restrictions on the export of AI chips has sent ripples through the tech industry, with Nvidia (NVDA) feeling the immediate impact. The proposed "Export Control Framework for Artificial Intelligence Diffusion" aims to address national security concerns by limiting the export of AI technologies and GPUs, particularly to countries not deemed "trusted" by the US. This move has sparked significant backlash from industry leaders, who argue that such restrictions could stifle innovation and inadvertently boost China's technological advancements. Oracle, among others, has voiced concerns that the framework could shrink the global chip market for US firms by 80%, effectively handing market leadership to Chinese competitors.
The framework, developed by the Bureau of Industry and Security, introduces stringent licensing requirements and export caps based on computing power rather than specific use cases. This has raised alarms about potential disruptions to GPU supply chains, increased operational costs, and challenges in compliance for cloud providers. Critics argue that the policy could strain international partnerships and hinder global AI collaboration, with Oracle's Executive Vice President Ken Glueck warning that the framework could undo the benefits of the $280 billion CHIPS Act.
Nvidia's stock closed at $140.11 on January 8th, down slightly from the previous close of $140.14, with an after-market decline of 0.96% to $138.77.