The US is poised to implement sweeping restrictions on the sale of advanced AI chips overseas.
If the rules take effect as planned on May 15, American tech companies such as NVIDIA could face major obstacles in the global AI race.
Under the proposed system called ‘AI diffusion‘ – which comes from the tail-end of Biden’s regime – countries are grouped into three tiers based on their closeness with the US. Top allies like Japan and most of Europe would have relatively smooth access to AI tech.
However, a broad second tier, including nations like India, Brazil, and Saudi Arabia, would face tighter controls. They’d be limited in the computing power they can buy and would have to meet strict security standards.
China and Russia are predictably in the third tier, effectively blocked from importing cutting-edge US AI chips.
The restrictions have raised alarm bells among American chipmakers. NVIDIA, for one, gets almost half its revenue abroad. The company warns the rules could put a large dent in its sales.
But it’s not just about money. The export controls are part of a wider US effort to maintain its AI advantage. Some experts, though, caution that being too restrictive could backfire. They point out that many key AI breakthroughs have come from global collaboration. Cutting too many countries out, they argue, could ultimately hurt American interests.
As the May 15 deadline looms, the Trump administration faces a balancing act. There’s bipartisan support for protecting US tech, but also economic risks in alienating allies.
The rise of China’s AI industry has only raised the pressure. Beijing has made tech self-sufficiency a top priority. It’s pouring money into homegrown chip development. And it’s getting results.
Just look at DeepSeek. In months, the Chinese startup has gone from obscurity to drawing comparisons with OpenAI. Its rapid progress, fueled by ample government support and unrivaled access to data, is turning heads from Silicon Valley to Washington.
For some, DeepSeek’s ascent is AI’s “Sputnik moment” – a wake-up call that America could be losing its edge.
As the clock ticks down to May 15, the choices made – to clamp down on AI exports or take a more open approach – could have ripple effects across a tech industry facing uncertainty.
The chips, as they say, are on the table. The question now is how the US will play its hand.
