Nvidia (NVDA) stock fluctuated Thursday as the Trump administration said it plans to repeal AI chip export restrictions put into place under former President Biden.
The AI chipmaking giant’s stock had ended Wednesday’s trading 3% higher after a Bloomberg report first indicated that a repeal of Biden’s so-called AI diffusion rule was coming. The Commerce Department confirmed the regulatory shift after Wednesday’s closing bell, 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 told Yahoo Finance in an email late Wednesday.
Nvidia rival Advanced Micro Devices (AMD) stock also gained nearly 2% on Wednesday and rose an additional 3.9% early Thursday.
Read more about Nvidia stock and today’s market action.
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.
Biden imposed the rule in January in his final days in office. It was set to go into effect in May.
The Commerce Department did not respond to follow-up questions about specific changes it would make to the former policy.
Big Tech companies, including Nvidia, had called on Trump to scrap the regulations, with the chipmaker’s vice president of government affairs Ned Finkle calling it an attempt “to rig market outcomes and stifle competition.”
Consequently, Wednesday’s news 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 last week that Trump administration officials are weighing the creation of a global licensing regime for chip exports with government-to-government agreements to replace Biden’s policy, 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.”
Meanwhile, Trump has set the stage to impose tariffs on semiconductors, which would be another blow to chip companies.
