Nvidia’s strategic engagement with the Trump administration has yielded a significant policy shift. The United States government has lifted restrictions on the export of American-made AI chips and intensified scrutiny on rival alternatives from Huawei. This development coincided with Nvidia CEO Jensen Huang’s participation in a meeting with President Trump in Saudi Arabia to attract investments for U.S. companies.
On Monday, the U.S. Department of Commerce (DOC) announced the repeal of the Artificial Intelligence Diffusion Rule, which was set to be enforced on May 15th. This rule aimed to limit the amount of U.S.-manufactured AI chips that could be exported without government approval. The DOC stated that a new framework for safeguarding U.S. AI technology will be forthcoming but offered no specifics about its provisions.
In a statement, the DOC expressed that the previous requirements would have hindered American innovation and imposed unnecessary regulatory burdens on companies. The agency also noted that the AI Diffusion Rule could have adversely impacted U.S. diplomatic relationships by categorizing various nations as second-tier partners.
The initial intention of the restrictions was to prevent nations like Russia and China from accessing American chip technology. However, these measures threatened to undermine Nvidia’s commanding position in the AI chip sector, where it holds an estimated 90% market share. Following the announcement of the Diffusion Rule by the Biden administration in January, Nvidia criticized it as “misguided,” suggesting a desire to revert to the pro-business policies seen during Trump’s first term.
Additionally, the DOC has cautioned firms against utilizing Huawei’s Ascend AI chipsets “anywhere globally,” indicating that such actions would breach U.S. export control regulations. Huawei’s domestically developed Ascend processors are viewed as a significant competitor to Nvidia’s leading AI chip offerings.
Notably, Huang was one of the few technology executives who did not attend Trump’s inauguration. Despite this, his recent interactions with Trump at the investment summit in Riyadh suggest a warming of relations. Other notable attendees included tech leaders such as Elon Musk, Lisa Su of AMD, Sam Altman from OpenAI, and Tim Sweeney of Epic.
The Washington Post reports that Trump made the administration’s intentions clear during the meeting, emphasizing the economic potential of investments. He addressed the Saudi Crown Prince Mohammed bin Salman, stating, “As you know, we have the biggest business leaders in the world here. They’re going to walk away with a lot of checks for a lot of things that you’re going to provide.”
