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US rescinds Biden-era AI diffusion rule and tightens chip export controls

The Commerce Department also announced new measures targeting overseas AI chip exports.

The US Commerce Department said it would rescind the Biden administration’s AI Diffusion Rule and strengthen export controls on semiconductors. The measures include guidance on Chinese chips, AI models and supply-chain protections.

Source: Bureau of Industry and Security of the United States

The US Department of Commerce building with an American flag.
The US Commerce Department announced changes to AI rules and chip export controls. Illustrative photo. Photo: G. Edward Johnson / Wikimedia Commons, CC BY 4.0

The US Department of Commerce announced it would rescind the Biden administration’s AI Diffusion Rule and take additional steps to strengthen export controls on semiconductors worldwide.

Issued on January 15, 2025, the rule’s compliance requirements were due to take effect on May 15, 2025. The Bureau of Industry and Security (BIS) plans to publish a regulation formalizing the rescission and issue a replacement rule in the future.

Jeffery Kessler, Under Secretary of Commerce for Industry and Security, instructed BIS enforcement officials not to enforce the Biden administration’s rule.

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BIS also announced guidance on overseas AI chips. It warned industry about risks associated with advanced computing integrated circuits from the People’s Republic of China, including specific Huawei Ascend chips, and outlined potential consequences of using US AI chips to train and run Chinese AI models.

The bureau also issued guidance to US companies on protecting supply chains against diversion tactics.

Source: Bureau of Industry and Security of the United States

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