The U.S. Commerce Department has abruptly canceled Biden-era AI chip export controls that were about to take effect, marking a significant shift in American technology trade policy. The rescinded rule would have placed new restrictions on advanced AI chip exports to over 100 countries beyond existing limits on China and Russia, creating a tiered system that generated substantial pushback from both chip manufacturers and international allies who feared the regulations could damage diplomatic relations and inadvertently strengthen China’s position in the global AI race.
The big picture: The Trump administration has reversed course on expanded AI chip export controls just before they were set to become effective, responding to pressure from tech companies and international partners.
- The now-canceled Biden rule would have created different tiers of export permissions for over 100 countries, restricting their access to advanced AI chips without federal approval.
- Chip manufacturers like Nvidia and AMD, alongside countries affected by the regulations, argued the restrictions would harm innovation and potentially drive nations to seek AI technology from China instead.
What they’re saying: Microsoft President Brad Smith claimed at a Senate hearing that Biden’s rule “was send a message to 120 nations that they couldn’t necessarily count on us to provide the AI they want and need.”
- Commerce Undersecretary Jeffery Kessler stated the Trump administration will work on a replacement rule to pursue AI development with “trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.”
- European Commission spokesperson Thomas Regnier welcomed the change, arguing the Biden rule would “undermine U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status.”
Behind the reasoning: The Commerce Department explicitly stated the canceled requirements “would have stifled American innovation and saddled companies with burdensome new regulatory requirements.”
- The Biden administration had designed the framework in an attempt to balance national security concerns with economic interests of U.S. technology producers.
- The Trump administration has promised future replacement rules but hasn’t yet specified what these regulations might entail.
Why this matters: The policy reversal represents a significant win for U.S. chipmakers and signals the Trump administration’s different approach to balancing international technology competitiveness against national security concerns regarding advanced AI capabilities.
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