The White House chips in

This year, Washington’s hand was everywhere in the markets, and nowhere was its grip tighter than in the red-hot AI trade.

In April, the Trump administration tightened Biden-era semiconductor export controls, blocking Nvidia from shipping several AI chips without a license. Then in July, the administration reversed its own ban on Nvidia’s H20 chips, after which Nvidia agreed to give the US government 15% of its China revenue in exchange for approval.

Earlier this month, the pattern escalated: Washington cleared Nvidia to sell its more powerful H200 chips to China, this time for a 25% revenue cut.

Policy or power play?

Economists say this is the most aggressive federal intrusion into the US economy since the 2009 bank-and-auto bailouts. Rather than leaving the semiconductor sector to its usual technical and strategic planning, the White House has inserted itself as the arbiter of what companies can build, sell, or invest in.

The administration has repeatedly used leverage to steer corporate decisions: threatening to revoke federal grants, brandishing steep tariffs on chips made abroad, and—in the case of Intel—even pressuring a board of directors to remove its CEO.

Direct government involvement like this is unusual, but investors should prepare their portfolios for more of the same next year, even beyond the AI trade. After all, plenty of President Trump’s policies will be coming home to roost in 2026: Analysts expect the full effect of tariffs to hit the US economy next year, new regulations from the One Big Beautiful Bill Act will kick in, and of course, Fed Chair Jerome Powell is up for replacement.

The White House made its presence felt in markets this year, and that’s not going to change anytime soon.—SY