The U.S. government has brought even advanced AI chips destined for overseas units of Chinese companies under export licensing requirements, raising the likelihood that Nvidia and AMD shares could come under pressure at the U.S. market open on June 1.

On May 31 (local time), blockchain media outlet BeInCrypto reported that the U.S. Commerce Department's Bureau of Industry and Security (BIS) issued guidance over the weekend requiring separate licences to export advanced AI chips to buyers whose ultimate parent company is in China.

The move focuses on closing enforcement gaps in existing rules rather than imposing a full embargo. The Trump administration suspended enforcement of AI diffusion rules put in place under the Biden administration in May last year, and for about a year after that, advanced chips were reported to have flowed in large quantities to overseas buyers linked to China. The industry believes the volume could reach hundreds of thousands of units.

The BIS has taken issue this time with top-tier processors. Nvidia's Rubin and Blackwell lines and AMD's MI350x accelerator were cited as representative examples. The BIS said the United States is seeking to block the possibility that Nvidia and AMD's most sophisticated AI chips could be brought into Chinese subsidiaries located outside China. Exporters will no longer be able to look only at the destination country and must also verify where the buyer's ultimate controlling party is based.

Some observers also say the immediate hit to earnings could be limited. The guidance has a stronger character of clarifying enforcement standards than introducing a new sweeping ban. Sales of lower-tier chips supplied under existing licences may continue under current conditions, and products already shipped will remain with customers. Nvidia also said it shipped zero Hopper units for China-bound data centres in the first quarter of fiscal 2027. That compares with $4.6 billion in the same period a year earlier, but total data centre revenue hit a record $75.2 billion on demand for the Blackwell 300.

The stock reaction may depend more on investor sentiment than the strength of the curbs. When a draft that would require government approval for global AI chip exports emerged earlier, Nvidia fell 1.8 percent and AMD dropped 2.2 percent. A similar but more limited reaction could appear this time as well, observers say.

Markets are also refocusing on indirect export routes used over the past year. Industry officials pointed to Singapore and Malaysia as suspected transshipment hubs. U.S. federal prosecutors have previously indicted operators of a GPU smuggling organisation worth $2.5 billion linked to similar diversion patterns.

The burden on distributors and cloud resellers is also expected to grow. Exporters will have to verify the ultimate parent company of all buyers, and customer vetting procedures will become stricter. The difficulty of supply chain management has risen further as company-specific sanctions and Middle East export restrictions have been added on top of China's regulatory framework since 2024.

Possible spillovers into the cryptocurrency market have also been raised. AI-related crypto tokens often move in tandem with U.S. semiconductor stocks. If sentiment toward semiconductor investment deteriorates into the spot market, weakness could spread to related tokens, observers say.

The key question is how much the measure will actually affect sales of core products. Some also raise the possibility that supply could be reallocated toward U.S. and allied-country customers. Next quarter's results are expected to be the first benchmark for gauging the impact of the tougher curbs.