Unlock the White House View Newspaper FREE
Your guide to what Trump’s second term for Washington, business and the world mean
If there were suspicions that geopolitics has come to play a major role in the fate of the US artificial intelligence industry, do not seek further than the last rise to the fate of Chipmaker Nvidia.
The value of the company’s stock market has just increased by more than half trillion dollars in the one -week space in the back of American policy that seemed directed to the needs of the country’s companies. At first glance, this may seem like a strong “buy” signal for us, but the effect of whip on technology reserves from the opening months of the White House Trump makes such optimism premature.
The hot chipmaker network at Wall Street began with the news that the new administration was ready to suspend the measures created to slow the spread of advanced worldwide. The so -called Diffusion Rule, notified late in the Biden Presidency and which would come into force this week, would have limited the free sale of the most sensitive technologies to the 18 closed allies.
Most other countries, sent to “Tier Two” status, would have access to only a limited supply of chips. Importantly, plans for the main models would also have been banned from exports to these countries, keeping the training and functioning of the most advanced one within a narrow circle of countries. Removing these restrictions not only tells about the new possible markets for American technology, but it can give companies a cheaper hand in setting the optimal location for their operations, perhaps even leading to an advanced offshoring.
This news was followed earlier this week with a significant reduction in heavy import tariffs set last month in China. A day later, and time to coincide with a visit to the Middle East from Trump, Nvidia’s shares received a big elevator after the company announced a major agreement to sell its most advanced database chips in Saudi Arabia.
American policy policy in direction that seems to favor its main companies as a welcome relief to Silicon Valley. However, far from the solution, the main parts of the new administration technology policy are now officially in the air. This leaves them vulnerable to the horse trading between different groups of interest in the White House, as well as the President’s Teka.
Areas of uncertainty include what a diffusion replacement rule will look like. The new administration may have shown an opening for countries like Saudi Arabia and the United Arab Emirates, which is also now in line for a large group of Nvidia-but still considering what additional restrictions are needed to prevent re-exporting US sensitive technology in China.
At the same time, it seems to be working on a new comprehensive tariff regime for semiconductors. And export restrictions on direct sales of chips in China continue to be a moving target. A month ago, the Nvidia market lid crashed with $ 370 billion in just three trade sessions after discovering recent searches in its sales in China. This brought a nadir for his stock – earlier, that is, the most favorable moves in Washington that have since helped to send the reserved price nearly 40 percent.
At least the signal from the Middle East this week has been that the US is very open to the unlimited business of it with its favored allies, and its technology companies have shown that they are more than ready to grow every open door presented to them. Countries such as Saudi Arabia can have a long way to develop the broader skills and skills of technology they aspire to, but at least they have abundant power supplies and cash.
The view of opening other markets is more difficult to predict. While the US is trying to reach a number of new trading agreements, there is a risk that access to its advanced technology will become only one more pawn, accumulated in negotiations.
American technology investors, meanwhile, can take an extra heart from Washington’s warning to international customers not to buy the latest Huawei Data Center Chips. In practice, there is not much a sign that is still a market for these chips outside China. To judge at the pace of recent advances, this will probably not always be the case. At one point, the open Chinese models of he awarded to run into a more advanced generation of Chinese chips he can come to represent a valuable alternative in global markets. The question, at that point, will be if Washington has already done enough to introduce her home in all markets that matter.
richard.waters@ft.com
