The United States government announced on Monday that it would impose further restrictions on artificial intelligence chip and technology exports, aiming to keep advanced computing power within the U.S. and its allies while limiting China’s access.

The new regulations will cap AI chip exports to most countries, allow unlimited access to U.S. AI technology for America’s closest allies, and continue blocking exports to China, Russia, Iran, and North Korea.

The extensive new rules, introduced in the final days of outgoing President Joe Biden’s administration, extend beyond China and are designed to help the U.S. maintain its dominant position in AI by controlling its spread globally.

“The U.S. leads AI now – both AI development and AI chip design, and it’s critical that we keep it that way,” U.S. Commerce Secretary Gina Raimondo said.

The regulations mark the culmination of a four-year effort by the Biden administration to limit China’s access to advanced chips that could bolster its military capabilities, while aiming to preserve U.S. leadership in AI by closing loopholes and introducing new controls on chip flows and global AI development.

While it remains uncertain how President-elect Donald Trump’s incoming administration will enforce the rules, both administrations share similar concerns about the competitive threat from China.

The regulations are set to take effect 120 days after publication, allowing time for the Trump administration to weigh in.

New limits will be imposed on advanced graphics processing units (GPUs), which are essential for powering data centers used to train AI models. Most of these GPUs are produced by Nvidia, based in Santa Clara, California, with Advanced Micro Devices also selling AI chips.

Nvidia and AMD saw their shares drop by 2% to 3% in premarket trading on Monday.

Major cloud service providers, such as Microsoft, Google, and Amazon, will be able to apply for global authorizations to build data centers, a key aspect of the new rules that will exempt their projects from the country-specific quotas on AI chips. Shares of all three companies dropped by about 1% in premarket trading.

To receive approval, authorized companies must comply with stringent conditions and restrictions, including security requirements, reporting obligations, and a track record or plan for respecting human rights.

Until now, the Biden administration had implemented broad restrictions on China’s access to advanced chips and the equipment to manufacture them, annually updating the controls to further tighten restrictions and include countries that might divert the technology to China.