Semi stocks start the week soft as White House reportedly plans stronger curbs on China’s access to AI chips

Semiconductor stocks are in the red on the heels of a report from Bloomberg that the Trump administration is cracking down on China’s ability to access AI chips via Malaysia and Thailand by curbing those countries’ ability to access those processors as well.

Nvidia was off as much as 1% in premarket trading.

Previously, Malaysia had reportedly received a pointed request from the US to monitor shipments of incoming chips to make sure they didn’t eventually end up in China in violation of export controls.

These potential measures would be part of an overhaul to the previous administration’s approach to managing exports of powerful chips around the world. In its final days, Biden administration unveiled a framework called the AI diffusion rule that restricted the ability of China and other “countries of concern” to access semiconductors, sending those stocks into a tailspin.

Reports on the Trump administration’s plans to scrap this Biden-era rule helped give semi stocks a lift and paved the way for the many multibillion-dollar deals signed between US tech firms and Saudi Arabian entities back in May.

Last Thursday, shares in companies that help chip companies make chips jumped after the Commerce Department told them they no longer needed to secure licenses to do business in China. While that was a seeming thaw of the trade war on its most contentious front — advanced technology — this Bloomberg report appears to underscore that when it comes to the bleeding edge of semiconductors that facilitate the AI boom, the US is still very much playing a game of keep-away with China.