Why is Trump's cancellation of AI executive orders important to the technology industry?

On the first day of his second term, President Trump revoked about 80 executive orders signed by the Biden administration, one of which focused on risk regulation of AI technology attracted particular attention. The order requires AI developers to submit technical test results related to national security to the government for review before announcing products. The purpose is to reduce the potential threat of AI technology to society and national security.

Trump's move is seen as sending a clear signal to industry: his administration will support AI development and reduce cumbersome regulatory provisions to promote technological innovation and industrial growth. For chip makers such as Nvidia(NVDA), AMD(AMD), and AVGO (AVGO), this may mean smoother product development processes and faster commercialization.

But experts also warn that reduced regulation could bring potential risks, such as weakened controls over the abuse of AI technology and increased product security vulnerabilities.

How will chip manufacturers benefit from the growth in AI demand?

Analysts predict that 2025 will be a year when demand for AI technology will explode, and capital expenditures in data centers are expected to increase by 40%. This is good news for manufacturers like Nvidia and AMD that focus on graphics processing units (GPUs), which are the core hardware of the AI training and reasoning process.

However, Citi analysis points out that application-specific integrated circuit (ASIC) suppliers such as Broadcom and Marvell(MRVL) may grow faster. Such products are usually optimized for specific applications and are better than traditional GPUs in terms of energy efficiency and performance, making them more attractive in certain AI application scenarios.

At the same time, the widespread popularity of AI applications will drive demand for various chips, especially in fields such as cloud computing, speech recognition, and self-driving cars.

How has the chip market performed recently?

After the news of Trump's policy shift, the U.S. stock chip sector generally rose. On Tuesday, Nvidia shares rose 1.1%, AMD rose 0.9%, and Broadcom rose 0.6%. But Marvell fell slightly 0.6%, possibly due to short-term funding adjustments. At the same time, the Standard & Poor's 500 index (SPX) rose 0.6%, indicating that the market is optimistic about overall economic and policy changes.

It is worth noting that the recent rebound in global chip demand and continued investment in AI and high-performance computing technology have provided these companies with stable growth momentum.