Biden's Final Chip Curbs Set To Shake AI Markets: 10 ETFs With High Stakes In Nvidia, AMD

The Biden administration's final chip curbs, expected to be announced as soon as Friday, are set to significantly impact the global AI market, particularly targeting Nvidia and AMD. The new regulations aim to divide nations into three tiers based on their access to advanced U.S. chip technology. Here's how these curbs will affect the global AI market, specifically targeting Nvidia and AMD, and the ETFs with high exposure to these companies.

Biden's Chip Curbs and the Global AI Market

The Biden administration's final chip curbs will have a substantial impact on the global AI market, with Nvidia and AMD being the primary targets. The new regulations aim to protect U.S. technological superiority and national security by restricting access to advanced AI chips. However, these restrictions may also strain relations with other countries and slow down global economic growth.

The global AI market is expected to grow at a CAGR of 40.2% from 2021 to 2028, reaching $190.61 billion by 2028. Biden's chip curbs may impact this growth by limiting access to advanced AI technologies for some countries.

Impact on Nvidia and AMD

Nvidia and AMD, as leading AI chipmakers, will face new caps on AI chip imports by Gulf states and Southeast Asian countries, further limiting their access to these markets. Nvidia has already faced restrictions on AI chip sales to China and Russia, which together represent a small share of its worldwide revenue. Nvidia has objected to the proposed limits, warning that they might compromise America's competitive advantage in the global AI race and slow down economic growth. After the news, Nvidia's shares dropped almost 1% in after-hours trading.

AMD, as another major AI chipmaker, is likely to face similar restrictions. The company's stock also edged lower in late trading following the announcement.

ETFs With High Exposure to Nvidia and AMD

Several ETFs have significant exposure to Nvidia and AMD, which could be impacted by the new AI chip export regulations announced by the Biden administration. Here are the top ETFs with the highest exposure to Nvidia and AMD, along with potential implications for their performance:

1. Nvidia (NVDA) exposure:
- ProShares Ultra Semiconductors (USD): 34.96% of holdings
- Strive U.S. Semiconductor ETF (SHOC): 21.10% of holdings
- YieldMax Target 12 Semiconductor Option (SOXY): 20.50% of holdings
- VanEck Semiconductor ETF (SMH): 20.21% of holdings
- VanEck Fabless Semiconductor ETF (SMHX): 20.11% of holdings

These ETFs have substantial exposure to Nvidia, which could be negatively affected by the new export restrictions. If Nvidia's stock price declines due to reduced sales and revenue, these ETFs may also experience a decrease in performance.

2. AMD (AMD) exposure:
- VanEck Video Gaming and Esports ETF (ESPO): 8.01% of holdings
- iShares Semiconductor ETF (SOXX): 7.12% of holdings
- AOT Growth and Innovation ETF (AOTG): 7.07% of holdings
- Invesco PHLX Semiconductor ETF (SOXQ): 7.04% of holdings
- REX FANG & Innovation Equity ETF (FEPI): 6.95% of holdings

These ETFs have notable exposure to AMD, which may face challenges due to the new regulations. If AMD's stock price is impacted by reduced sales or revenue, these ETFs could also experience a decline in performance.

The new AI chip export regulations could have a significant impact on the performance of these ETFs, as they have substantial exposure to Nvidia and AMD. The restrictions may lead to reduced sales and revenue for these companies, which could translate into lower stock prices and, consequently, decreased performance for the ETFs. However, it is essential to monitor the situation closely, as the final details and implications of the regulations are still being determined.




In conclusion, Biden's final chip curbs will significantly impact the global AI market, particularly targeting Nvidia and AMD. The new regulations aim to protect U.S. technological superiority and national security by restricting access to advanced AI chips. However, these restrictions may also strain relations with other countries and slow down global economic growth. The global AI market is expected to grow at a CAGR of 40.2% from 2021 to 2028, reaching $190.61 billion by 2028. Biden's chip curbs may impact this growth by limiting access to advanced AI technologies for some countries. The ETFs with high exposure to Nvidia and AMD could also be affected by these regulations, potentially leading to decreased performance if the companies' stock prices decline due to reduced sales and revenue.