The Trump administration is reportedly considering changes to a Biden-era rule that limits global access to advanced AI chips, with potential revisions set to impact how these semiconductors are distributed internationally. The existing rule, which divides the world into three tiers, is scheduled to take effect on May 15. Under the current system, certain countries, like those in the first tier, have unrestricted access to the chips, while others face limits based on regional categories. This regulatory shift is designed to restrict the flow of powerful AI chips to adversarial nations, such as China and Russia.
Sources familiar with the situation suggest that the Trump administration is exploring alternatives to the tiered system, possibly replacing it with a global licensing structure that would involve government-to-government agreements. This shift could enhance the U.S.’s leverage in trade negotiations, as access to American-made chips would become a more direct bargaining tool. Officials are still debating the potential changes, with some advocating for the removal of tiers in favor of a more simplified system.
The original rule was created to ensure that the most advanced AI chips stay within the U.S. and its allies, especially as these chips are critical for AI development and military applications. However, the tiered structure has drawn criticism from industry players and some U.S. lawmakers, who argue that it might encourage countries to seek less regulated alternatives, such as China’s AI chips. Critics, including tech executives from companies like Oracle and Nvidia, have voiced concerns about the potential negative impact on global competition and U.S. chipmakers’ market position.
One key aspect of the potential change involves adjusting the threshold for chip orders that would not require a license. Under the existing rule, countries can place orders of up to 1,700 Nvidia H100 chips without needing government approval. The Trump administration is considering lowering this threshold significantly, which could increase the administrative burden on chip manufacturers and potentially limit their ability to sell internationally without government oversight.
The Biden-era rule, which was set to go into effect under the new administration, has sparked significant debate among business leaders and lawmakers. Some, like seven Republican senators, have even called for its withdrawal, warning that it could inadvertently push countries to turn to China’s cheaper, unregulated chips. The ongoing discussions highlight the tension between national security concerns and the desire for free market competition in the global semiconductor industry.
Source: Reuters