NVIDIA, Oracle, and many other tech giants are now demanding the Trump administration reverse the "AI diffusion" policy, which could be devastating for the markets.
US Tech Firms Might Witness Another Disruptive AI Restriction Policy Under The Trump Administration
It seems like the AI markets never get a break from policy changes. According to a Bloomberg report, tech companies are requesting the US government not to proceed with an AI policy introduced under the Biden administration. It is claimed that the policy is set to be effective in around two months from now, and given that it gets implemented, firms like NVIDIA could see a major hit in AI revenue, mainly since the policy restricts the flow of chips to other nations by a huge margin.
Before we go into the report, let's take a look at the "AI Diffusion" policy. Introduced by the previous government, it divided the countries to which NVIDIA's advanced AI GPUs can be exported into three categories. The first is a list of nations that are either aligned with US national security objectives or are not a threat to the US. These countries can secure the chips without any hindrance. The second category consists of hostile nations such as Russia and Iran, which are entirely barred from procuring either US-origin GPUs or AI software.
Finally, the third category limits countries like India from importing large amounts of GPUs without scrutiny. These nations will be able to import specific amounts of GPUs without regulatory scrutiny, and the restrictions are designed to prevent the targeted countries from building large-scale data centers capable of advanced defense research. Interestingly, US key allies like Poland and Israel will, too, face chip export restrictions, which raises the question about what the policy is intended for.
Under the Trump administration, the policy could see different forms, including all countries requiring an export license to acquire AI chips and limiting the shipment volumes based on the country importing them. The key target for the current administration is to limit tech transfer to the likes of China, which has been ongoing despite the US implementing export restrictions.
