Trump administration rescinds Biden’s AI diffusion rules

On Tuesday, the Department of Commerce initiated a rescission of the Biden Administration’s AI Diffusion Rule, while announcing additional steps to strengthen export controls on semiconductors worldwide. The AI Diffusion Rule was issued on January 15, 2025, with compliance requirements that were set to come into effect on May 15, 2025. These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements, the DOC said, adding that the AI Diffusion Rule also would have undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status. Under Secretary of Commerce for Industry and Security Jeffery Kessler has instructed BIS enforcement officials not to enforce the Biden Administration’s AI Diffusion Rule, stating: “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. 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.” In addition, BIS announced actions to strengthen export controls for overseas AI chips, including: Issuing guidance that using Huawei Ascend chips anywhere in the world violates U.S.export controls. Issuing guidance warning the public about the potential consequences of allowing U.S. AI chips to be used for training and interference of Chinese AI models. Issuing guidance to U.S. companies on how to protect supply chains against diversion tactics. Publicly traded companies in the space include AMD (AMD), Intel (INTC), Marvell (MRVL), Microchip (MCHP), Micron (MU), Nvidia (NVDA), Qualcomm (QCOM) and Texas Instruments (TXN).