Nvidia Drops Sharply on Wall Street After Dispute with Biden Administration

Nvidia’s criticism of Biden’s new regulations and its support for Trump highlight the growing tension over the future of AI technology in the U.S. This has negatively impacted its stock and created uncertainty in the global market.

Nvidia’s shares dropped nearly 4% on Monday as the chipmaker opposed a last-minute attempt by the Biden administration to impose new AI regulations. The company explicitly called on President-elect Donald Trump to reject these policies.

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NVDA/USD

Nvidia harshly criticized the Biden administration and praised Trump in a press release on Monday in response to new export restrictions targeting the company’s coveted AI chips. This criticism coincided with a rare losing streak for Nvidia on Wall Street and growing support for Trump in Silicon Valley.

Nvidia’s stock fell as much as 4.7%, reaching $129.51 shortly after the market opened, as pressure on its international business intensified, further driving down its stock price.

New Regulatory Framework

On Monday, President Joe Biden announced a regulatory framework aimed at controlling the transfer of AI technology, primarily targeting Nvidia. The goal is to limit AI chip exports to foreign countries and companies.

The White House justified the move as an effort to keep advanced AI systems out of the reach of “concerned countries,” citing concerns about China’s use of U.S. technology during Biden’s administration.

The possibility of export restrictions poses a challenge for Nvidia, as China, Singapore, and Taiwan accounted for more than half of its $35 billion revenue in the last financial quarter, with China contributing $5.4 billion.

Rejection and Trump Support

In a strong statement, Nvidia rejected the new regulations: “Biden’s new rules will only weaken the global competitiveness of the U.S., undermining the innovation that keeps us at the forefront,” said Ned Finkle, Nvidia’s vice president of government affairs, arguing that it is an attempt by the White House to “manipulate market outcomes and stifle competition.”

Nvidia’s statement also reflected support for Trump, noting that “Trump’s first administration laid the foundation” for the recent AI revolution. The stock had fallen more than 15% since its all-time high last week, erasing up to $578 billion in market capitalization from its peak valuation of $3.75 trillion.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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