US Lifts AI Chip Export Limits, Warns Against Huawei in Major Win for Nvidia

The Biden administration has scrapped plans to restrict international sales of US-made AI chips, delivering a major victory to Nvidia—while simultaneously warning global buyers against using Huawei’s competing Ascend processors. The abrupt policy reversal signals a shift toward deregulation in the high-stakes AI hardware race.

Commerce Department Kills “AI Diffusion Rule”

The US Department of Commerce (DOC) revoked its proposed “AI Diffusion Rule” just weeks before its May 15 implementation date. The regulation would have required government approval for exporting advanced AI chips, but officials now argue it would have “stifled innovation, created unnecessary red tape, and strained diplomatic partnerships.” The decision effectively removes barriers for Nvidia, which controls an estimated 90% of the AI accelerator market.

“This misguided policy would have handed our technological edge to competitors,” a Nvidia spokesperson said, praising the reversal as a return to “pro-growth strategies from the previous administration.”

Huawei in the Crosshairs

While easing restrictions on domestic firms, the DOC issued a stark warning about Huawei’s Ascend AI chips—direct competitors to Nvidia’s offerings. Officials emphasized that foreign adoption of the Chinese-designed processors violates US export controls, escalating tensions in the semiconductor cold war. The move underscores Washington’s strategy: unleash American tech giants while constraining China’s alternatives.

Nvidia’s Political Alignment

The policy shift coincides with Nvidia CEO Jensen Huang’s high-profile appearance at a US-Saudi investment summit alongside former President Donald Trump and tech luminaries like Elon Musk and Sam Altman. Trump explicitly courted Saudi investment during the event, declaring that American executives would “make deals happen.” Huang’s presence—and Nvidia’s public preference for Trump-era policies—highlights the chipmaker’s growing political influence as AI becomes a geopolitical battleground.

With export barriers lifted and competitors discouraged, Nvidia stands to consolidate its dominance in the AI hardware market. But the dual moves also reveal a broader administration calculus: in the race for AI supremacy, the US appears willing to prioritize corporate interests over tighter controls—as long as China’s alternatives remain contained.