Trump to Scrap Biden-Era AI Chip Export Curbs, Boosting Nvidia and Tech Stocks

In a major policy reversal, the Trump administration plans to rescind the Biden-era AI chip export restrictions, just days before the so-called "AI diffusion rule" was set to take effect. The original rule divided countries into three tiers, requiring U.S. chipmakers like Nvidia and AMD to navigate complex licensing frameworks for exporting advanced semiconductors. Tech giants hated it. Foreign governments were frustrated. Now, Trump’s team is tearing it up.

The Trump administration says it’s not abandoning chip export controls altogether—just overhauling them. Instead of the bureaucratic maze Biden left behind, the new plan aims to be more “streamlined,” with tougher enforcement on nations allegedly redirecting chips to China, such as Malaysia and Thailand. At the same time, the White House is exploring targeted agreements with countries like the UAE and Saudi Arabia, both eager to boost their AI ambitions and data center buildouts.

Nvidia, which has been vocal in opposing the diffusion rule, got an instant reward from the news. Shares jumped 3.1% on the day, helping lift the broader semiconductor index. CEO Jensen Huang has long argued that cutting off global customers only pushes them toward China—and now it seems the White House agrees. A pause on the restrictions could give U.S. firms a short-term boost, especially in markets like India and Southeast Asia, where demand is booming.

Trump’s move also comes with a strategic carrot: he’s heading to the Middle East next week, where countries like the UAE have pledged up to $1.4 trillion in U.S. tech and infrastructure investment. The timing of this rollback? Not a coincidence. Insiders say the UAE could even land a government-to-government AI chip agreement—essentially a VIP pass to Nvidia’s hottest products.

While the repeal gives breathing room to some countries and companies, it’s far from a free-for-all. The administration is still weighing tighter curbs on AI model “weights,” a crucial piece of LLM technology. And with dozens of chip-hungry countries knocking at the door, Trump’s team will face the delicate task of writing one-off rules while keeping China boxed out. It’s AI diplomacy at hyperscale—and the stakes are only getting higher.