The administration of President Donald Trump has reversed one of the last regulations established by his predecessor. The Department of Commerce has rescinded the AI Diffusion Rule, which was introduced by former President Joe Biden in January and was set to take effect on May 15. This rule restricted the export of US-made AI chips to certain international markets. Previously, Trump had walked back the broader AI guidelines adopted by Biden in October 2023 as part of his initial wave of executive orders upon taking office.

Although the Department of Commerce will no longer enforce the previous AI Diffusion Rule, the Bureau of Industry and Security (BIS) has announced that it will release a replacement policy at a later date. The BIS has also taken the following actions:

• Issued guidance stating that the use of Huawei Ascend chips anywhere in the world violates US export controls.

• Issued guidance warning the public about the potential consequences of allowing US AI chips to be used for training and inference of Chinese AI models.

• Issued guidance to US companies on how to protect supply chains against diversion tactics.

This sector is likely to become increasingly relevant to the US’s international affairs, including ongoing tariff negotiations with China and potential deals in the Middle East. NVIDIA may be an indicator of the current administration’s approach to exporting AI infrastructure. The company recently revealed that the federal government is requiring a license for the export of its H20 chips to certain regions, including China, Macau, Hong Kong, and countries designated as D:5 under the US Arms Embargo.