08:43 AM EST, 01/14/2025 (MT Newswires) -- (Update to add company comment in eight paragraph)

Nvidia ( NVDA ) shares recovered slightly in recent premarket activity Tuesday after falling 2% on Monday following the Biden administration's updated export rules for AI chips.

Shares of the chipmaker were up 1.7% in recent premarket activity.

The updated regulations control the flow of AI chips, mainly graphics processing units, to countries deemed "adversaries," like China.

The White House said Monday that the rule limits GPU orders from most nations that do not have a special license, though smaller orders of 1,700 or fewer GPUs are exempt.

The White House said the rule is crucial for ensuring US leadership in AI and preventing adversaries from exploiting advanced AI technologies.

While 18 key US allies, including the UK, Netherlands, and Taiwan, will be exempt from restrictions, countries such as China, North Korea, and Russia will continue to be barred from using the latest AI chips.

The new rule also aims to close loopholes from prior restrictions and raise AI security standards by reducing smuggling and tightening controls, the White House said.

Nvidia ( NVDA ) said the Biden Administration's restrictions access to mainstream computing applications with its unprecedented and misguided 'AI Diffusion' rule, threatens to derail innovation and economic growth worldwide.