Shares of semiconductor leaders Advanced Micro Devices (AMD) and Nvidia (NVDA) experienced significant declines on Friday following the U.S. Senate’s advancement of a bill aimed at restricting exports of artificial intelligence chips to China. This move has reignited fears surrounding trade tensions between the U.S. and its increasingly competitive counterpart.
The proposed legislation seeks to impose limitations on the number of advanced AI processors that American companies can export, specifically targeting shipments to China. However, the bill’s future is unclear, as President Donald Trump, who had previously relaxed chip export regulations, may choose to veto it. Meanwhile, the House of Representatives is currently working on its own version of the legislation, which does not include restrictions on exports.
As a result of these developments, investors reacted promptly, leading AMD’s shares to drop around 7% and Nvidia’s to slide approximately 5%. This decline showcases the renewed anxieties about the U.S. government’s restrictive approach to technology trade with Beijing.
Despite the downturn on Friday, both companies have enjoyed substantial gains throughout the year, with AMD’s stock soaring approximately 83% and Nvidia’s rising about 41%. Both firms have become significant players in the booming AI sector. Nevertheless, the Senate’s proposed actions highlight the escalating challenges that U.S. chipmakers may face in a volatile trade policy environment. This situation serves as a reminder of the delicate balance between nurturing technological innovation and navigating international trade relations.