The Biden administration has proposed new rules governing the export of advanced AI chips and technologies to about 120 countries.
The framework, published on Monday, introduces a tiered system categorizing countries based on their relationship with the US.
Allies such as the United Kingdom, Canada, and Japan will face fewer restrictions compared to nations under US embargoes, which will continue to be barred from acquiring advanced AI technologies.
For other countries, including Mexico and Switzerland, there will be limits on the quantity of AI chips they can import.
The announcement sparked criticism from industry players, with dominant firm Nvidia Corp (NASDAQ:NVDA, ETR:NVD) describing the rule as “misguided.”
"This sweeping overreach would impose bureaucratic control over how America's leading semiconductors, computers, systems and even software are designed and marketed globally,” Nvidia vice president of government affairs Ned Finkle wrote in a blog post.
“And by attempting to rig market outcomes and stifle competition – the lifeblood of innovation – the Biden administration's new rule threatens to squander America's hard-won technological advantage.”
Nvidia shares fell 2.8% to $132 on the announcement.
The proposed chip export restrictions do not take effect for 120 days, allowing President-elect Donald Trump the opportunity to change or repeal them.