TLDR
- Senate approved bipartisan legislation Thursday requiring Nvidia and AMD to sell advanced AI chips to US customers before Chinese companies
- Nvidia shares reached all-time high of $192.57 Thursday and climbed to $193.47 in Friday premarket trading
- House version of defense bill lacks export control language, creating uncertainty about final law
- China ramped up customs inspections of US semiconductor shipments at major ports in recent weeks
- Tech industry opposes the measure, claiming it will damage competition and slow innovation
The Senate passed legislation late Thursday requiring Nvidia and AMD to prioritize American buyers over Chinese companies when selling advanced AI chips. The bipartisan measure sailed through as part of the annual defense policy package.
Nvidia stock closed at a record $192.57 on Thursday. Shares extended gains Friday, rising to $193.47 in premarket trading.
Senator Jim Banks, the Indiana Republican co-sponsoring the bill, said it strengthens US competitiveness in key industries. Democratic co-sponsor Elizabeth Warren said American customers shouldn’t wait behind Chinese tech giants for the latest processors.
The legislation follows increased Chinese customs inspections of US chip shipments. Officers at major ports have conducted strict checks over recent weeks, according to Financial Times reports citing three sources.
Nvidia didn’t comment on the inspections when contacted. The company previously called the legislation well-intentioned but unnecessary, noting the US is already its largest market.
Industry Pushback Against New Controls
Tech leaders have criticized the export restrictions. Industry groups argue the rules will harm competition and innovation rather than help American companies.
The Senate vote came after a Trump administration summer deal with Nvidia and AMD to ease China export limits. Opponents plan to keep pressing Congress to drop the chip restrictions.
AI policy group Americans for Responsible Innovation praised the measure as a win for economic competitiveness and national security. The tech sector disagrees.
Uncertain Path to Final Law
The House passed its defense bill version in September without chip export language. Both chambers must now negotiate a final package that may exclude the provision.
The Senate ended a monthlong stalemate with Thursday’s vote. Whether the chip restrictions survive negotiations remains unclear.
Stock Rally Continues Through Week
Nvidia dropped Monday after AMD announced a long-term OpenAI supply agreement. The stock recovered and posted weekly gains overall.
News that Nvidia is funding Elon Musk’s xAI startup helped drive shares higher. Taiwan Semiconductor Manufacturing’s revenue surge Thursday also boosted the stock.
Nvidia rose 0.5% in Friday premarket trading. S&P 500 futures were flat.
The stock ignored both China customs inspections and new Senate legislation. Nvidia maintained upward momentum despite regulatory challenges.
The priority access requirement aims to limit exports to China and foreign adversaries. Chipmakers would need to serve US companies first when supplies run tight.
Nvidia and AMD haven’t explained how they’d comply if the measure becomes law. New systems would be needed to track and prioritize customer orders.
The Senate approved the restrictions as lawmakers work to curb China’s access to cutting-edge technology. The bill targets advanced AI processors that power machine learning applications.
Nvidia shares have climbed steadily this week. The company benefited from strong Taiwan Semiconductor earnings and its xAI investment announcement.
