Nvidia (NVDA) shares fell nearly 2% on Monday following the Biden administration’s updated export restrictions on AI chips, targeting countries like China. The new rule limits GPU exports to most countries without a special license, capping shipments at 50,000 units for advanced chips like Nvidia’s Hopper or 20,000 units of its Blackwell chips.
The White House emphasized that AI is “central to both security and economic strength” and stated the need to prevent adversaries from leveraging advanced US technology. Key allies such as the UK, Netherlands, and Taiwan remain exempt, while countries like China, North Korea, and Russia face outright bans.
These restrictions aim to address loopholes in previous rules and curb unauthorized shipments of cutting-edge chips. Nvidia’s H20 chips for China are reportedly unaffected. However, analysts warn that the 50,000-GPU export cap could pose risks to Nvidia’s revenue, particularly in data center GPU sales.
Nvidia criticized the rule, stating it could hinder competition and innovation. Companies have 120 days to comment on the policy before it goes into effect next year.
Nvidia’s stock, already down 9% over five sessions, reflects investor concerns over potential sales impacts from the new regulations. Bank of America and Citi analysts noted the rule complicates Nvidia’s growth trajectory but maintain confidence in the company’s long-term potential.