The Trump administration has confirmed plans to revoke the Biden-era global export restrictions on AI chips and replace them with a new regulatory framework. The move would affect curbs that were due to take effect on 15 May 2025 under a policy known as the AI Diffusion Rule, which was designed to categorise countries by risk and restrict access to advanced semiconductor technology accordingly.
“The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation,” a US Department of Commerce spokeswoman said, as reported by Reuters. “We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance.”
According to officials, the forthcoming policy will seek to balance national security priorities with maintaining the competitiveness of US semiconductor firms. Until a replacement regime is finalised, the existing export controls will remain in place.
The AI Diffusion Rule had drawn criticism from major US chipmakers, including Nvidia and Advanced Micro Devices (AMD). These companies warned that the rule’s scope and implementation complexity could negatively impact international business operations. Nvidia previously stated it could lose up to $5.5bn in forecasted revenue due to the restrictions, while AMD estimated a potential $1.5bn impact in 2025.
Following the announcement, shares in Nvidia rose by over 3%, and AMD stock increased by approximately 1.8%, as investors responded to the expected easing of export constraints.
A revised approach under the Trump administration is expected to emphasise flexible mechanisms such as bilateral export agreements with key international partners. Officials indicated that such arrangements could reduce the risk of diverting high-end chip technology to geopolitical adversaries while allowing US firms to continue engaging in global trade.
Structure of the AI Diffusion Rule
The previous regulation introduced under the Biden administration categorised foreign markets into tiers with escalating export limitations, prioritising a more restrictive model targeting nations deemed to present significant security concerns. Industry participants have argued that this model has been difficult to comply with and has created uncertainty in technology supply chains.
As the Trump administration prepares its replacement rules, there is also an effort to address concerns about the re-export of US-origin AI chips through third-party jurisdictions and the integration of unauthorised semiconductors into AI systems in countries such as China. Officials stated that measures under consideration include enforcement mechanisms aimed at preventing indirect access to sensitive hardware by restricted entities.
The review and update process is expected to take several months. During this period, semiconductor producers, trade partners, and regulators will be monitoring changes in US export policy closely. The administration has also reiterated its intention to continue enforcing the existing AI chip export regulations until the new strategy is implemented.
US chipmakers have maintained that any regulatory model should ensure fair access to global markets while protecting national security interests.
Read more: Nvidia hit with $5.5bn charge following US export curbs on AI chips
