Low Chance of Trump Reversing Biden’s AI Chip Export Control

Public Investment Bank Bhd suggests that the incoming administration of President-elect Donald Trump is unlikely to fully reverse the Biden administration's recent decision to impose restrictions on AI chip exports, particularly targeting Nvidia, which dominates the global market with over 80% share.

This move is part of the Biden administration’s strategy to limit access to advanced computing power, ensuring the US retains its lead in AI by controlling the supply of critical components.

In a recent note, Public Investment Bank noted that while a complete reversal seems unlikely, Trump’s administration could soften the restrictions in exchange for more favourable trade terms.

Additionally, tighter export controls may accelerate China’s efforts to develop its own AI chips in the coming years.

It said:

"China is poised to make a significant stride in its chipmaking capabilities, with the production of 28 nanometer (nm) lithography equipment this month, a development that has taken many industry experts by surprise.”

Trump to Maintain the Restrictions?

Trump is expected to uphold new US restrictions on global sales of AI chips, including those from Nvidia Corp., according to a senior Biden administration official.

The new rules, unveiled by the White House last week, impose limits on shipments of advanced AI processors, both by company and country, expanding trade curbs primarily aimed at China due to national security concerns over its pursuit of advanced technology.

While the Trump administration may adjust certain aspects of the restrictions, National Security Advisor Jake Sullivan expressed confidence that the fundamental elements of the policy will likely remain intact.

Sullivan expressed in an interview:

“Obviously it’s going to be up to them how they want to proceed, and they may have internal debates the same way we had internal debates about exactly how to calibrate the rule. But I would be surprised sitting here today if, after 120 days, they looked at the landscape as we’ve looked at it, and said, ‘You know, we really don’t need this at all.’”

Some were quick to express that Trump may have a reason to keep the export controls in place.