The U.S. Department of Commerce has rescinded the Biden Administration’s AI Diffusion Rule, originally set to take effect on May 15, 2025, citing concerns over its impact on innovation, regulatory burden, and international relations. The DOC plans to issue a new, more collaborative rule in the future. In the meantime, the agency introduced new measures to strengthen global export controls on AI chips, including warnings about Huawei, Chinese AI training, and supply chain security. Officials emphasized a shift toward a more inclusive strategy under the Trump Administration to safeguard U.S. AI leadership. They write:
Today, the Department of Commerce (DOC) initiated a rescission of the Biden Administration’s AI Diffusion Rule, while announcing additional steps to strengthen export controls on semiconductors worldwide.
The AI Diffusion Rule was issued on January 15, 2025, with compliance requirements that were set to come into effect on May 15, 2025. These new requirements would have stifled American innovation and saddled companies with burdensome new regulatory requirements. The AI Diffusion Rule also would have undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status.
BIS plans to publish a Federal Register notice formalizing the rescission and will issue a
replacement rule in the future.Under Secretary of Commerce for Industry and Security Jeffery Kessler has instructed BIS
enforcement officials not to enforce the Biden Administration’s AI Diffusion Rule, stating:
“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. At the same time, we reject the Biden Administration’s attempt to impose its own illconceived and counterproductive AI policies on the American people.”In addition, BIS today announced actions to strengthen export controls for overseas AI chips,
including:
• Issuing guidance that using Huawei Ascend chips anywhere in the world violates U.S.
export controls.
• Issuing guidance warning the public about the potential consequences of allowing U.S. AI
chips to be used for training and interference of Chinese AI models.
• Issuing guidance to U.S. companies on how to protect supply chains against diversion
tactics.Today’s actions ensure that the United States will remain at the forefront of AI innovation and
maintain global AI dominance.
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