Stocks Tumble On Report US Plans Licenses For Global Chip Exports

In addition to real war with Iran, Trump appears set to restart the simmering trade war with China. 

According to Bloomberg, US officials have written draft regulations that would restrict AI chip shipments to anywhere in the world without American approval, giving Washington broad control over whether other countries can build facilities for training and running artificial-intelligence models, and under what conditions. In other words, while Nvidia has long been the world’s AI kingmaker, now the Trump administration is considering taking a formal role in the industry that would include similarly sweeping powers.

If the rule passes, companies would need to seek US permission for virtually all exports of AI accelerators from the likes of Nvidia and Advanced Micro Devices, which represents a global expansion of curbs that currently cover around 40 countries. 

According to the report, the specific approval process would depend on how much computing power a company wants.

Shipments of up to 1,000 of Nvidia’s latest GB300 graphics processing units, or GPUs, would undergo a fairly simple review with certain exemption opportunities. Companies building bigger clusters would need pre-clearance before seeking export licenses. They could face conditions such as disclosing their business models or allowing the US government site visits, depending on the specifics of the data centers in question.

For truly massive deployments - more than 200,000 of Nvidia’s GB300 GPUs owned by one company, in one country - the host government would have to get involved. For context, 200,000 GB300s is the number that NScale, a UK company that specializes in renting AI chips to third parties, is planning to provide to Microsoft Corp. across four sites in the US and Europe. The firm described this deal as “one of the largest AI infrastructure contracts ever signed.” 

The US would only approve such exports to allies that make stringent security promises and “matching” investments in American AI, the people said, noting that the draft rule doesn’t specify an investment ratio.

The news promptly sparked a selloff across the semiconductor space, with Nvidia and AMD both tumbling alongside the broader semiconductor space...

... which in turn dragged the S&P and pretty much everything else - including Treasuries - to session lows.