MW There goes 80% of the market, says one reaction to new White House microchip rules
By Steve Goldstein
New rules, opposed by industry, would limit AI exports to all but 18 key allies and partners
One of the strongest reaction to new microchip export restrictions that were unveiled on Monday is that 80% of the market may evaporate because of it.
The White House on Monday announced new restrictions on artificial intelligence exports that will impact companies including Nvidia.
The restrictions, impacting companies including Nvidia and Advanced Micro Devices, were consistent with Bloomberg's report last week on what was coming.
Nvidia shares $(NVDA)$ fell 3% as AMD stock $(AMD)$ dipped 2% in premarket trade. The broader market also is weaker on concerns over how many interest-rate cuts the Federal Reserve will make this year.
Under what's called the interim final rule on artificial intelligence diffusion, most countries will be subject to caps on chip orders.
The White House said the restrictions will not apply to 18 key allies and partners, and countries and entities that meet high security and trust standards can apply for higher status.
Countries that do not will be able to buy the equivalent of 50,000 advanced GPUs per country, a White House fact sheet said.
Last week, the Semiconductor Industry Association - of which Nvidia and AMD are members - said they were "deeply concerned" about the rules, which they said were developed without industry output and could "significantly undercut U.S. leadership and competitiveness."
Oracle $(ORCL)$ executive vice president Ken Glueck said the rules will reduce the global chip market for U.S. companies by 80%. He wrote the rules will take place 60 days after publication. "Let's be clear. A rule of this consequence on that timetable will turn the U.S. cloud industry upside down," he said.
-Steve Goldstein
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January 13, 2025 06:58 ET (11:58 GMT)
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