Trump Rescinds Biden’s AI Export Rule: What It Means for U.S. Chipmakers, Global Trade, and National Security
In a surprise reversal that answers top-searched questions like "What happened to Biden's AI export restrictions?" and "Are AI chip exports to China still banned?", the Trump administration has officially rescinded the Biden-era Artificial Intelligence Diffusion Rule just days before it was set to take effect. This controversial rule aimed to limit the export of U.S.-made AI chips to a range of countries, including key trading partners and adversaries like China and Russia. The move has major implications for semiconductor companies, international AI regulation, and U.S. national security strategy.
The Biden administration introduced the AI Diffusion Rule in January 2025 to strengthen export controls on AI chips and technology, targeting unauthorized use in military and surveillance applications by foreign governments. Under the rule, countries were divided into three tiers based on their relationship with the U.S. and the level of risk posed. Tier 1 allies like Japan and South Korea would face no new restrictions, while Tier 2 countries such as Mexico and Portugal would experience export limits for the first time. Tier 3 nations—including China and Russia—were to face the strictest controls, aimed at halting the diffusion of U.S. AI advancements to potentially hostile powers.
However, on May 13, just two days before the rule’s planned rollout, the U.S. Department of Commerce (DOC) announced it would no longer enforce the regulation. According to reports, the Trump administration intends to pursue a more flexible approach involving case-by-case negotiations with foreign governments rather than sweeping export bans. This shift is expected to benefit American chipmakers like NVIDIA and AMD, which rely heavily on international markets for high-performance AI processors.
In place of the rescinded rule, the DOC issued updated guidance for AI chip exports. It reiterated existing export control laws, warned companies about the use of Huawei’s Ascend AI chips, and urged chipmakers to monitor and prevent unauthorized re-export or misuse of their products in high-risk regions. These guidelines are part of a broader strategy to balance national security concerns with the economic interests of U.S. tech companies in the competitive AI hardware market.
Commerce Secretary Jeffrey Kessler emphasized that the administration seeks to build strategic AI partnerships with trusted nations while denying advanced AI capabilities to adversarial governments. “The Trump Administration will pursue a bold, inclusive strategy for American AI technology with trusted foreign countries,” he said. “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.”
As the U.S. redefines its role in regulating next-gen AI technologies, industry leaders and investors will need to monitor evolving trade policies, geopolitical risks, and compliance standards. One thing is clear: the battle over who controls the future of artificial intelligence is far from over.
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