US rescinds AI chip export controls

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The US Department of Commerce (DOC) under Donald Trump will instead pursue dealmaking on a country-by-country basis

This week, the DOC has announced it will cancel the so-called ‘AI Diffusion Rule’, a policy related to the export of AI semiconductor technology, just two days before it was due to come into effect.

The policy, drafted during the last month of the Biden administration, would see countries categorised into three tiers based on numerous factors, including geopolitical and national security concerns. Tier 1 countries, which includes close allies like the UK and South Korea, would face no restrictions on AI chip exports; tier 2 countries, like Singapore and India, would have limited export controls, and Tier 3 countries, like Russia and China, would face heavy export controls.

One of the major goals of the policy was to limit China’s access to US chips via third countries, as well as pressurising nations to adopt stricter security requirements around the technology.

The policy was met by significant pushback from the international community, which complained that the arbitrary nature of the categorisation. US chipmakers like Nvidia also criticised the proposal, saying it added unnecessary red tape to international trade.

The Trump administration seems to agree with these misgivings.

“These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements.  The AI Diffusion Rule also would have undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status,” said the DOC in a statement.

The government is now moving to revise these rules, with insiders suggesting export policy will likely be handled on a country-by-country basis, rather than sweeping categorisation. Countries expected to still face greater restrictions include Malaysia and Thailand, which are known to have diverted chips to China, according to sources.

Alongside this statement, the Bureau of Industry and Security (BIS) has also warned that using Huawei Ascend chips anywhere in the world violates US export controls, as well as issuing guidance against using US technology for the training of Chinese AI models.

“The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.  At the same time, we reject the Biden Administration’s attempt to impose its own ill-conceived and counterproductive AI policies on the American people,” said the Under Secretary of Commerce for Industry and Security Jeffery Kessler in a statement.

Dealmaking with individual nations is set to take place in the upcoming months.

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Author: Ernestro Casas -

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