Trump Administration to Overturn Biden’s Global AI Chip Export Restrictions

The Trump administration is set to rescind and revise a Biden-era regulation that aimed to limit the global export of advanced artificial intelligence (AI) chips, according to a Department of Commerce spokesperson. The original rule, established in January just before Biden left office, was designed to restrict China’s access to high-performance chips, which are seen as a critical element in advancing military capabilities and maintaining U.S. leadership in AI technology. The Biden administration’s framework divided the world into three tiers based on countries’ access to these advanced semiconductors, with some nations facing stringent caps or outright bans.

The rule, which was slated to take effect on May 15, set limitations for the majority of countries while granting unlimited access to AI chips for 17 nations and Taiwan. However, nations such as China, Russia, Iran, and North Korea were excluded, reflecting the growing concern over national security and the global race for AI superiority. The U.S. sought to use this regulation to safeguard its technological edge while restricting adversaries from accessing AI technology that could benefit their defense capabilities.

A spokeswoman for the Department of Commerce criticized the Biden-era rule, calling it overly complex and bureaucratic, suggesting it would stifle American innovation. In contrast, the Trump administration plans to replace the Biden framework with a simpler rule aimed at enhancing U.S. technological leadership and expanding AI capabilities. Though specifics remain unclear, officials have expressed dissatisfaction with the tiered system, calling it “unenforceable” and preferring a more flexible, global licensing approach for AI chip distribution.

The Trump administration’s planned changes may open up global access to advanced AI chips, especially for countries that were previously restricted. This would potentially ease the pathway for companies like Nvidia, a major AI chip designer, to expand exports. Shares of Nvidia saw a brief increase following news of the proposed regulatory shift, reflecting market optimism about the potential economic benefits from loosening export restrictions.

Despite the optimism, the timeline for these changes remains uncertain, with ongoing debates within the administration about the best approach. The new rule is expected to replace the previous tiered system and potentially shift towards government-to-government licensing agreements to better control the distribution of AI technology.

Source: Reuters