On May 13, 2025, the U.S. Department of Commerce formally canceled the Biden administration's Framework for Artificial Intelligence Diffusion, ending months of opposition from major tech companies and Republican lawmakers.
The now-rescinded policy, introduced by former President Joe Biden in January, would have created unprecedented global restrictions on advanced AI chip exports. It divided countries into three tiers with varying levels of access to cutting-edge AI semiconductors from companies like Nvidia and AMD. While 17 countries and Taiwan would have received unlimited access, approximately 120 nations would have faced strict quotas, and countries like China and Russia would have remained under tight restrictions.
"The Biden AI rule is overly complex, overly bureaucratic, and would stymie American innovation," a Commerce Department spokeswoman stated. "We will be replacing it with a much simpler rule that unleashes American innovation and ensures American AI dominance."
The decision represents a significant victory for chipmakers like Nvidia, whose shares climbed following the announcement. Nvidia CEO Jensen Huang had previously warned that being locked out of global AI markets would constitute a "tremendous loss" for American companies. In a statement, Nvidia welcomed the administration's "leadership and new direction on AI policy," adding that with the rule revoked, "America will have a once-in-a-generation opportunity to lead the next industrial revolution."
While specific details about the replacement policy remain unclear, sources indicate the Trump administration is likely to focus on direct bilateral negotiations with individual countries rather than blanket restrictions. The administration is expected to maintain strict controls on China while potentially opening doors for country-specific agreements.
Senator Ted Cruz (R-Texas), who opposed the original rule, announced plans to introduce legislation creating a "regulatory AI sandbox" modeled after approaches used during the early internet era. The policy shift comes amid ongoing debates about balancing national security concerns with America's competitive position in the rapidly evolving global AI landscape.