In a surprising and market-shaking twist, semiconductor giants like Nvidia, AMD and Broadcom saw their stocks jump on Thursday thanks to a major policy shift by the Trump administration. The news? Trump plans to scrap strict chip-export rules that were about to kick in under President Biden’s leadership. These rules would have put strong limits on the global sale of artificial intelligence (AI) chips, including beyond China.

According to the latest reports, Nvidia shares rose 1.6% to $118.97 in premarket trading, AMD gained 1.7%, and Broadcom was up 2.2%. This rally came shortly after the U.S. Commerce Department announced on Wednesday afternoon that it no longer plans to implement Biden-era AI restrictions. The Wall Street Journal confirmed the update.

The now-scrapped restrictions known as the “AI diffusion” rules were originally set to go into effect on May 15. These rules aimed to limit AI chip exports globally, not just to China. Analysts at BofA Securities had predicted the move would shrink the long-term AI chip market by as much as 10%.

Nvidia Responds Strongly, but Future Rules Still Unclear

Reacting to the reversal, Nvidia stated:

“We welcome the administration’s leadership and new direction on AI policy. With the AI Diffusion Rule revoked, America will have a once-in-a-generation opportunity to lead the next industrial revolution.”

While the current update has lifted market confidence, experts are cautious. It’s still unclear if this rollback will lead to new export rules, which could turn out to be even stricter. Reports suggest that the White House is considering including AI chip limits in bilateral deals with specific countries. More developments are expected soon, especially with President Donald Trump’s upcoming visit to the Middle East. Sources say AI chip exports will be a major topic during his meetings there.

According to Raymond James analyst Ed Mills:

“We generally expect that Trump will increase the total of chips allowed to be sold globally, starting with Saudi Arabia and the United Arab Emirates, but this could also come with more enforcement to prevent the diversion of banned chips to China.”

As the global tech race heats up, all eyes are now on how this high-stakes policy shift will reshape the future of the AI chip industry and the power balance in international tech trade.