In early 2025, the United States sharply escalated its “small yard, high fence” strategy for artificial intelligence. The Bureau of Industry and Security (BIS) formally introduced the Framework for Artificial Intelligence Diffusion, a regulatory overhaul designed to eliminate loopholes involving third-country intermediaries, shell companies, and intangible AI assets.
Unlike earlier export rules that focused narrowly on hardware, the new framework treats AI as a full-stack capability, spanning silicon, software, ownership structures, and even trained model data.
🧱 The 2025 Export Control Overhaul #
The updated rules, effective mid-January 2025, represent the most aggressive expansion of U.S. technology controls since the original GPU bans of 2022–2023.
Global Performance Thresholds #
- BIS established worldwide performance caps for advanced accelerators
- Shipments of top-tier GPUs such as NVIDIA H100 and H200 now require export licenses for any destination outside a designated allied “green zone”
- This effectively globalized U.S. jurisdiction over cutting-edge AI compute, even in markets previously considered neutral
The “50 Percent Rule” #
- Export restrictions now automatically apply to any foreign entity that is 50% or more owned by a blacklisted Chinese company
- The rule was explicitly designed to block the use of shell companies in regions such as the UAE, Singapore, or Southeast Asia
- Ownership, not location, became the decisive compliance metric
Controls on AI Model Weights #
- For the first time, U.S. export controls explicitly cover AI model weights
- This prevents the transfer of advanced American-trained AI logic even when:
- No physical hardware crosses borders
- Training occurs in third countries
- The move signals that intellectual diffusion, not just silicon, is now treated as a national security asset
⚖️ NVIDIA’s Legal and Regulatory Pressure #
As the dominant supplier of advanced AI accelerators, NVIDIA found itself at the center of simultaneous regulatory actions in both the U.S. and China.
China’s Antitrust Investigation #
- On September 15, 2025, China’s State Administration for Market Regulation (SAMR) announced preliminary findings against NVIDIA
- Authorities alleged violations of China’s Anti-Monopoly Law, focusing on:
- Bundling practices
- “Unreasonable trading conditions” following NVIDIA’s Mellanox acquisition
- The probe is widely viewed as intertwined with broader U.S.–China trade negotiations
U.S. Securities Litigation #
- On December 11, 2024, the U.S. Supreme Court declined to hear NVIDIA’s appeal in a major securities fraud case
- This allowed a class-action lawsuit to proceed, alleging NVIDIA:
- Misled investors about the extent to which revenue growth was driven by crypto-mining demand
- Overstated the stability of its gaming business during the prior cycle
- While unrelated to export controls, the ruling amplified investor scrutiny during a politically sensitive period
🔄 The “Trump Pivot” and Late-2025 Developments #
By December 2025, U.S. AI policy entered a more volatile phase under the new administration.
The H200 Waiver #
- On December 8, 2025, President Trump announced a one-year waiver permitting limited sales of NVIDIA H200 accelerators to vetted Chinese customers
- The waiver applies only to:
- Approved end users
- Strict post-shipment monitoring
- The move marked the first major relaxation of AI export rules since 2022
The Revenue “Tax” #
- In exchange for export licenses, NVIDIA and AMD were reportedly required to remit 15% of China-related AI chip revenue to the U.S. Treasury
- This mechanism effectively transformed export licensing into a direct federal revenue stream
- Critics argue it blurs the line between national security policy and tariff-based industrial strategy
Domestic Political Backlash #
- In response, U.S. lawmakers introduced the SAFE CHIPS Act in December 2025
- The bill aims to:
- Prevent unilateral executive waivers
- Block advanced AI chip sales to China
- Sponsors argue that even controlled H200 exports pose long-term strategic risks
📊 Market Status Overview (As of Late 2025) #
| Event | Date | Impact |
|---|---|---|
| AI Diffusion Framework | Jan 2025 | Closed third-country loopholes and regulated AI model weights |
| Compliant Chip Ban (H20) | Apr 2025 | Eliminated previously allowed “downgraded” accelerators |
| China Antitrust Findings | Sept 2025 | NVIDIA ruled in violation of monopoly laws |
| H200 License Waiver | Dec 2025 | Conditional approval for limited China sales |
The 2025 AI export regime marks a structural shift: control now extends beyond hardware into ownership, software, and data itself. For companies like NVIDIA, compliance is no longer just a supply-chain challenge—it is a permanent geopolitical constraint embedded into the AI business model.