Nvidia (NVDA) stock rose 3% to end the trading day Wednesday following a Bloomberg report that the Trump administration plans to repeal AI chip export restrictions put into place under former President Joe Biden.
The Commerce Department confirmed the regulatory shift in a statement to Reuters and Axios, saying Biden’s AI rule was “overly complex” and “overly bureaucratic.”
“We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance,” a spokesperson said.
The department did not immediately respond to Yahoo Finance’s questions about what specific changes it would make to the former policy.
Nvidia rival Advanced Micro Devices (AMD) also jumped on the news, rising roughly 1.8%. Nvidia and AMD pared gains after the bell, seeing shares down fractionally in after-hours trading.
The Biden-era rule, known as the AI diffusion rule, uses a tiered system to cap the amount of AI chips that could be exported to key US trading partners in an attempt to thwart chip smuggling to China through other countries. It also significantly limits the ability of US companies to expand their AI data center capacity abroad.
The AI diffusion rule was passed by Biden in January and was set to go into effect in May. President Trump will not enforce the policy, according to unnamed sources cited by Bloomberg.
Big Tech companies, including Nvidia, had called on Trump to scrap the AI diffusion rule, with the chipmaker’s vice president of government affairs Ned Finkle calling it an attempt “to rig market outcomes and stifle competition.”
Wednesday’s news, consequently, offered a welcome reprieve for Nvidia and AMD after other Trump trade policies helped push their stocks down about 13% and 17%, respectively, in 2025. The stocks’ sharp declines include losses that followed Trump’s bans on exports of the companies’ AI chips to China.
However, Trump’s planned change to the AI diffusion rule won’t necessarily be a panacea for chip companies.
Reuters reported Trump administration officials are weighing the creation of a global licensing regime for chip exports with government-to-government agreements, which Citi analyst Atif Malik said in an analysis “would be potentially more strict than Biden’s as they would put AI chips at the center of tariff negotiations.”
Other analysts have also warned that a shift from the AI diffusion rule could actually make it tougher for chipmakers to do business abroad.
Meanwhile, Trump has set the stage to impose tariffs on semiconductors, which would be another blow to chip companies.
TD Cowen analysts said this week the administration could impose semiconductor tariffs as high as 25% as soon as July. It’s unclear how the tariffs would work, as most chips arrive in the US as already finished products, such as servers and smartphones.
Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social. Email her at laura.bratton@yahooinc.com.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
