AI Action Plan spurs infrastructure, indicates understanding of supply chain: analysts

The Trump Administration’s AI Action Plan should spur the development of artificial intelligence infrastructure and indicates an understanding of the semiconductor supply chain, according to analysts.

It likely bodes well for semiconductor firms such as Nvidia (NASDAQ:NVDA), Intel (NASDAQ:INTC) and AMD (NASDAQ:AMD).

“We think the AI Action plan, coupled with the flip-flopping on semi-tariffs in the U.S.-China trade war, indicates that the administration is gaining a better understanding of the semi-supply chain and where the U.S. stands within it,” said Tech Stock Pros, Investing Group Leader for Tech Contrarians. “The White House is looking to shrink red tape, which is a positive, particularly for companies like Nvidia and Intel.”

However, the analyst said it is “unlikely to yield tangible action plays in the near term.”

The plan could also prove positive for tech firms pursuing open-source AI.

“Current open-source leaders like Meta Platforms (NASDAQ:META) and IBM (NYSE:IBM) could get a long-term boost if these companies’ open-source business goals accurately converge with the open-source regulatory efforts,” said Seeking Alpha analyst Uttam Dey.

The infrastructure pillar of the plan should push even more capital expenditures on AI.

“That will mean more investments onshore, and companies that can demonstrate onshore investments in AI will likely escape scrutiny of their businesses or investments,” Dey added.

Joe Albano, Investing Group Leader for Tech Cache, said the plan finally provides a framework for how the U.S. plans to approach the AI revolution, which should bring some relief to the tech industry.

“It’s been more than three long years of hemming and hawing from the federal government since AI took center stage, and this plan provides concrete direction for AI-related companies to understand where they can push forward their business (in other countries, with allies, etc.) and where to direct their resources,” Albano said. “Many of the technical experts in various levels of the AI industry I know and follow are breathing a collective sigh of relief, as they now know not only where to direct their efforts but also feel the nuances of the Plan are correct for the US to maintain and build its AI lead.”

UBS analysts point out the plan proposes to formulate “full-stack AI export packages” to prevent some nations from “turning to our rivals,” is also positive for chip makers.

“This reads positively for compute/GPU suppliers, as the CEO of the largest GPU supplier appears to have successfully argued its position to the Trump Administration – the outcome of which is a potential lifting of the ‘ceiling’ on compute power allowed to ship into China,” said UBS analysts, led by Timothy Arcuri, in a note.

“Overall we view it as easing regulatory constraints on AI to ensure US leadership, but we also note that incremental export control is still not off the table,” added Citi analyst Atif Malik, in a note.