⚖️ Trump Biden’s Artificial Intelligence Diffusion Rule

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Biden’s AI Chip Export Rule Withdrawn at Last Minute

Just days before it was set to take effect, the U.S. Department of Commerce formally rescinded the Biden administration’s Artificial Intelligence Diffusion Rule, which aimed to introduce a tiered system of AI chip export controls based on national security concerns. The rule would have imposed new restrictions on exporting U.S.-made AI chips to dozens of countries for the first time, tightening limits especially for nations like China and Russia. Instead, the Commerce Department is signalling a shift toward negotiating bilateral agreements rather than enforcing broad, one-size-fits-all restrictions.

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What’s Out for Now — and What’s Still In

While the rule itself is off the table for now, U.S. companies working with AI hardware or training large-scale models abroad are not in the clear. The Commerce Department has reiterated existing restrictions, including the prohibition on using Huawei’s Ascend AI chips globally and warnings against allowing U.S. chips to train models in countries like China. This guidance still carries weight without a formal rule, especially in compliance audits or future enforcement actions. Expect regulators to remain aggressive on national security, even as the legal framework gets rewritten.

Implications for AI Startups and Export-Driven Tech Companies

The rule’s withdrawal offers temporary breathing room but not long-term certainty for AI startups building advanced models or exporting chips. Companies operating globally should continue to assess their exposure to supply chain and export compliance risk, particularly if they operate in or near Tier 2 or Tier 3 jurisdictions under the former proposal. With a replacement rule on the horizon and geopolitical tensions high, startups should consider investing in internal compliance and legal infrastructure now, rather than waiting for the next wave of enforcement to land.

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