Trump to scrap Biden's "AI diffusion rule" Thursday in win for chipmakers
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Nvidia CEO Jensen Huang. Photo: Akio Kon/Bloomberg via Getty Images
The Trump administration will scrap a looming Biden-era rule Thursday that would have restricted how American technology is exported overseas, and is planning to issue new guidance within a few months, a source familiar with the matter told Axios.
Why it matters: The so-called AI diffusion rule was a top target for the Trump administration and a number of AI and chip companies, who said it imposed overly complex rules that would make it difficult for American companies to sell abroad.
- Scrapping it is a win for chipmakers like Nvidia, who would have potentially faced significant controls on which countries could buy their products in what quantities. The rule being rescinded was first reported by Bloomberg.
- The administration is currently working on a new control scheme, which could take the form of a new rule or an executive order, leaving Nvidia and others without short-term certainty as to what happens next.
Zoom out: The export caps were part of the Biden administration's broader strategy to limit access to the chips needed to power cutting-edge AI, largely so that Chinese firms wouldn't have backdoors to access tech that existing export controls prevent them from importing directly.
What they're saying: "The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation," a spokesperson for the Commerce Department's Bureau of Industry and Security said in a statement.
- "We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance."
Between the lines: Individual countries like Saudi Arabia and the UAE — both of which Trump will visit next week — were lobbying hard to get the restrictions on them loosened ahead of the deadline.
- Nvidia and other companies involved in the production of high-end chips had pushed back hard against the export caps when they were under consideration in the closing weeks of the Biden administration.
- Others, like Al company Anthropic, have urged against export rules that are too lenient, citing the need for the U.S. to protect its intellectual property and technology.
Nvidia shares popped sharply in late trading after the Bloomberg report, reversing early weakness and closing up more than 3%.
Editor's note: This story has been updated with background on the rule.
