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For the many people wondering what artificial intelligence (AI) policy will look like under President Donald Trump, a recent development may offer some insight.
Since before Trump took office, many people have wondered how his administration will address AI regulation, something that plenty of experts believe is necessary for the U.S. economy to continue maintaining healthy growth.
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While both President Trump and Vice President JD Vance have made it clear they support less regulation and want to help the U.S. achieve global AI dominance, few specific details have been offered. So far, the administration’s tariff policies have negatively impacted leaders such as Nvidia (NVDA) , which is caught in the crossfire of fierce trade tensions between the U.S. and China.
However, the White House is reportedly considering something that could benefit certain U.S. tech companies, though it could further strain its already complicated relationship with China.
Trade tensions between the US and China are impacting tech
As the market turned a new corner into 2025, investors carried high hopes that leading AI companies would continue to grow. Both established tech leaders and innovative new startups were making notable progress, while many tech stocks continued to trend upward.
Late in January 2025, though, things took a sharp turn as a previously unknown company entered the ring. A Chinese AI startup called DeepSeek shocked the world as it rolled out its R1 AI model, built on less advanced AI chips and trained for a fraction of what some CEOs claimed it costs to train large language models (LLMs).
Related: Tariffs could lead to major nightmare for U.S. tech stocks
This unexpected development triggered a massive selloff, as chipmakers such as Nvidia and Advanced Micro Devices plunged on declining investor confidence. Over the following weeks, DeepSeek’s R1 garnered popularity, producing a spot for itself among models made by OpenAI, Microsoft, and Anthropic.
Now, however, this new competitor may have a much harder time procuring a share of the U.S. market than previously anticipated. The Trump administration imposed restrictions on U.S. companies that sell AI chips to Chinese companies. This is a blow to both Nvidia and DeepSeek, which trained its model on Nvidia graphics processing units (GPUs).
That’s only the beginning, though. Sources have indicated they may also impose penalties that would prevent DeepSeek's purchases from U.S. tech companies and may even ban U.S. users from accessing the AI model.