Nvidia Stock Tumbles as Biden's AI Chip Export Ban Sparks Global Controversy

The Biden administration's proposed new restrictions on artificial intelligence chip exports have significantly impacted the stock market, with Nvidia's shares dropping over 3% following the announcement. The new export ban, which is expected to see implementation soon, includes a multi-tiered approach where a select few U.S. allies retain full access to American semiconductors, while many other nations face new limitations, and some countries are entirely barred from acquiring data center chips.

Nvidia, through its Vice President of Government Affairs, Ned Finkle, has criticized these measures. Finkle argues that imposing control on globally used technology embedded in gaming PCs and associated with data centers is impractical. He also warns that such extreme regulatory policies could unknowingly drive the tech world to seek alternative technologies.

"Artificial intelligence has become as vital as electricity in modern technology," Finkle noted, urging President Biden to reconsider the timing and approach of this policy, highlighting potential backlash from both the American industry and the international community. Nvidia's stance is supported by other tech giants, with the Information Technology Industry Council (ITIC) representing companies like Amazon, Microsoft, and Meta also expressing concern over the detrimental effects such limitations could have on the U.S. position in global markets.

The Semiconductor Industry Association (SIA) has issued a statement expressing deep concerns over what they describe as unprecedented regulatory scope and complexity. The association cautioned that these measures, developed without industry input, could seriously undermine the U.S.'s leadership in semiconductor and advanced AI systems.

Despite these criticisms, the U.S. Department of Commerce and the White House have yet to respond publicly. Reports suggest that the Biden administration plans to regulate AI chip distribution by making major cloud service providers like Google and Microsoft gatekeepers, a move intended to prevent adversaries from acquiring advanced AI technology.

In response, international voices are also raising alarms. China's Foreign Ministry has denounced the actions, accusing the U.S. of abusing export control measures under the guise of national security, thus harming international trade order and stability, and vowed to take necessary measures to protect its rights and interests.