US Department of Commerce Rescinds Biden’s Artificial Intelligence Diffusion Rule
The US Department of Commerce (DOC) has formally rescinded the controversial Artificial Intelligence Diffusion Rule, a regulation that was set to come into effect on May 15 under the Biden administration, as reported by TechCrunch.
The rule, introduced by former President Joe Biden in January 2025, was aimed at limiting the export of US-made AI chips to certain countries, marking the first instance of such restrictions on AI technology exports. However, just days before its implementation, the DOC announced it would not enforce the regulation, opting instead to replace it with a new set of guidelines.
Details of the Proposed Tier System
The Artificial Intelligence Diffusion Rule had drawn significant attention and debate due to its proposed tiered approach to restricting AI chip exports. Under the rule, countries were categorized into three tiers with varying levels of restrictions on AI chip exports.
Tier 1 countries, including allies like Japan and South Korea, would have faced no export restrictions, while Tier 2 countries, such as Mexico and Portugal, would have seen limitations on the first-time export of AI chips.
Meanwhile, Tier 3 countries, notably China and Russia, would have faced the strictest controls, with significant restrictions on the export of high-performance AI chips, designed to prevent the use of U.S. technology in military and adversarial AI applications.
Secretary of Commerce for Industry and Security Jeffrey Kessler, said, “The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.”
He added, “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.”
Also read: New York’s RAISE Act Targets AI Safety, Adds Protections for AI Whistleblowers
New Guidance for AI Chip Exporters
According to TechCrunch, in place of the soon-to-be-implemented restrictions, the DOC released guidance for US companies engaged in the AI chip sector. The directive underlines the sustained ban on employing Huawei's Ascend AI chips, which breach current US export regulations, and emphasizes the necessity of protecting chip supply chains from possible diversion maneuvers.
It also alerts companies to the danger of allowing US AI chips to be employed for training AI models in China, which will unwittingly allow for the building of AI systems in areas of national security concern.
