Trump administration rescinds curbs on AI chip exports to foreign markets

NEW YORK (AP) — Responding to complaints from the tech industry and other countries, the U.S. Department of Commerce has rescinded a Biden-era rule due to take effect Thursday that placed limits on the number of artificial intelligence chips that could be exported to certain international markets without federal approval.

“These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements,” the Commerce Department stated in its guidance.

President Joe Biden established the export framework shortly before he left office in an attempt to balance national security concerns about the technology with the economic interests of producers and other countries. While the United States had already restricted exports to adversaries such as China and Russia, some of those controls had loopholes and the rule would have set limits on a much broader group of countries, including Middle Eastern countries that President Donald Trump is visiting this week.

The Biden rule's sorting more than 100 countries into different tiers of export restrictions drew strong opposition from those countries, as well as U.S. chipmakers like Nvidia and Advanced Micro Devices. They argued the restrictions could actually push some countries to turn to China instead of the U.S. for their AI technology.

What Biden's rule did "was send a message to 120 nations that they couldn’t necessarily count on us to provide the AI they want and need,” said Brad Smith, Microsoft's president, at a U.S. Senate hearing last week.

Commerce Undersecretary Jeffery Kessler said Tuesday that President Donald Trump's administration will work to replace the now-rescinded rule to pursue AI with "trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries." The administration said a replacement rule is coming in the future but hasn't said what the new rule will say.

The European Commission welcomed the change, said spokesperson Thomas Regnier, arguing that the Biden rule, if it took effect, would "undermine U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status.”

European Union countries should be able to buy advanced AI chips from the U.S. without limitations, Regnier said.

“We cooperate closely, in particular in the field of security, and represent an economic opportunity for the U.S., not a security risk,” he said in a statement.