Trump Administration Rescinds Biden-Era AI Diffusion Rule

Chaitanya Kohlion 2 minute read
2 minute read

The United States Department of Commerce has officially rescinded a Joe Biden-era rule aimed at placing limits on the number of artificial intelligence (AI) chips exported to certain countries without federal approval, according to a TechCrunch report.

The AI Diffusion Rule, which was due to come into effect on May 15, mandated a tier-based categorization of countries around the world for the purpose of exporting AI chips.

Just a few days ago, US President Donald Trump inked a deal with the United Arab Emirates (UAE) to build the largest AI campus outside the US. The agreement grants the UAE expanded access to advanced AI chips.

The deal reflects the Trump administration’s confidence that AI chips can be managed securely by mandating US companies to oversee data centers.

US vs China For Global AI Dominance

Both the Biden and Trump regimes have aimed to rein in China’s semiconductor ambitions over concerns that advanced AI technology and chips might give Beijing an edge in military affairs.

The now-scrapped AI Diffusion Rule aimed to weaken China’s AI dominance by dividing nations around the globe into three tiers. 

Tier 1 countries, like Japan and South Korea, would have faced no export restrictions. Tier 2 countries, like Mexico and Portugal, would have experienced chip export limits for the first time. And Tier 3 nations, like China and Russia, would have had to deal with tightened controls.

“These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements,” the US Commerce Department said in its guidance.

Even with the rule gone, Trump has continued tightening curbs on US-origin chip exports to China.

US Commerce Undersecretary Jeffery Kessler said that the Trump administration will work to replace the Biden-era rule, in order to pursue AI with “trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.”

Advertisements

Why It Matters

Trump has made major changes to AI regulation in the US since he assumed office in January 2025. He has signed several executive orders repealing actions taken under the Biden administration, including a 2023 directive that listed measures to ensure AI safety and security, citizen privacy, equity, consumer and worker protection, and innovation promotion.

The US also declined to sign the Paris AI Action Summit’s joint statement on sustainable AI, a stance shared by the UK. Meanwhile, 59 countries, including India, signed the agreement.

US AI companies appear aligned with the new direction — for instance, American firm Anthropic has dropped voluntary AI safety commitments introduced under Biden.

All this indicates that the US has entered a new era with respect to AI under Trump — one where the 78-year-old sees fit to provide advanced AI chips to a Middle Eastern nation like the UAE.

What makes this agreement even more intriguing is the fact that the UAE’s largest trading partner is, after all, China.

Also Read:

Support our journalism:

For You