In a significant policy reversal, the Trump administration has officially rescinded the Biden administration's Framework for Artificial Intelligence Diffusion rule just days before its May 15 implementation date. The move signals a fundamental shift in how the United States will control the global flow of advanced AI technology.
The Biden-era rule, issued in January 2025, established a three-tiered system for regulating exports of high-powered AI chips. Under this framework, 17 countries and Taiwan in the first tier could receive unlimited chips, approximately 120 countries in the second tier faced caps on AI chip imports, while countries like China, Russia, Iran, and North Korea in the third tier were blocked from accessing these technologies.
According to Commerce Department officials, the tiered approach was "unenforceable" and would have "stifled American innovation and weakened diplomatic relationships with key strategic partners." Industry stakeholders, including major tech companies like Nvidia and Oracle, had criticized the rule for potentially fragmenting supply chains and creating competitive disadvantages for U.S. firms.
The Trump administration is now developing a replacement framework centered on bilateral government-to-government agreements. This approach aligns with President Trump's broader trade strategy of making deals with individual countries, effectively turning access to American-designed AI chips into powerful leverage in trade negotiations. Commerce Secretary Howard Lutnick had previously indicated his desire to include export controls in trade talks.
"The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries," a Commerce Department spokesperson stated. While the new policy is still being formulated, it maintains the administration's commitment to preventing advanced computing technology from reaching countries of concern.
The policy shift comes amid growing concerns about China's AI advancements, particularly following the release of DeepSeek's R1 chatbot, which some have called a "Sputnik moment" highlighting the inadequacy of past U.S. controls. The House Select Committee on the Chinese Communist Party recently released a report calling for expanded export controls and improved enforcement to address threats from Chinese AI development.