Trump to Rescind Global Chip Curbs, Prep New AI Restrictions
The Trump administration plans to rescind some Biden-era AI chip curbs as part of a broader effort to revise global semiconductor trade restrictions that have drawn strong opposition from major tech companies and foreign governments.
The repeal of the so-called AI diffusion rule, which is not yet final, seeks to refashion a policy launched under President Joe Biden that created three broad tiers of countries for regulating the export of chips from Nvidia Corp. and others. The Trump administration will not enforce that framework when it takes effect on May 15, according to people familiar with the matter, and is instead drafting its own version of the rules that’s likely to focus on direct negotiations with nations like the United Arab Emirates or Saudi Arabia.
The policy debate, which remains ongoing, centers on the question of how to regulate semiconductor shipments to places outside of China. Both Trump and Biden officials have sought to crack down on Beijing’s semiconductor ambitions, over concerns that advanced chip and AI technology could lend China a military edge.
Scrapping the AI diffusion framework won’t change the measures targeting China, which Trump recently toughened. Rather, it would provide fresh opportunities for other countries to negotiate their own chip access, as governments around the world seek to develop domestic AI capabilities. Those deals could be influenced by investment promises or broader trade and diplomatic considerations.
US officials could announce their intent to repeal the AI diffusion rule as soon as Thursday, one of the people said — ahead of President Donald Trump’s trip to the Middle East, where a number of nations have bristled at the latest restrictions. Trump’s replacement regulations, which the people said will aim to strengthen controls on chips abroad, are still taking shape.
“The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation,” the Commerce Department’s Bureau of Industry and Security said in a statement released by a spokesperson. “We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance.”
Shares of chipmakers rose after Bloomberg News reported on the move. Nvidia climbed 3.1%, and the Philadelphia Stock Exchange Semiconductor Index — a closely watched benchmark — gained 1.7%.
The US first imposed sweeping restrictions on advanced chip sales to China in 2022, and has ratcheted up those measures several times to encompass a broader swath of semiconductors and a growing list of countries. That included a 2023 expansion to more than 40 nations, including much of the Gulf and parts of Southeast Asia, where Biden officials suspected China could access banned technology via intermediaries. The AI diffusion rule, unveiled during Biden’s final week in office, expanded those licensing requirements to most of the world.
The framework was designed to further crack down on China’s ability to access US chips via third countries, and to bring more nations into the US orbit by setting security requirements to access best-in-class American technology. The rule included caps on total shipments to places like the UAE and Saudi Arabia, which already had to obtain US government approval for advanced chip imports under the 2023 regulations. It also imposed chip controls for the first time on dozens of countries, including India, Malaysia and Poland.
While Trump’s plan to not enforce the AI diffusion rule provides a temporary reprieve for those nations, some controls are likely still coming.
Trump officials intend to impose curbs on countries that have diverted chips to China, including Malaysia and Thailand, one of the people said. In the meantime, the Commerce Department will continue to strictly enforce existing chip export rules, according to the people, who asked not to be identified because the plans are not yet public.
Source : Bloomberg
