• Announcement details: On Wednesday, the Trump administration planned to rescind and replace a Biden-era rule regulating global export of high-end AI accelerator chips. Bloomberg and Reuters reported this. A Commerce Department spokeswoman said the previous framework was overly complex and bureaucratic and would stifle American innovation. They aimed to create a simpler rule to boost American innovation and ensure AI dominance.
• Biden administration's action: In January during its final week in office, the Biden administration issued the Framework for Artificial Intelligence Diffusion. It established a three-tiered system for regulating AI chip exports. The first tier included 17 countries and Taiwan with unlimited advanced chips. The second tier had about 120 countries with caps on imports. The third tier including China, Russia, Iran, and North Korea was blocked from accessing the chips.
• Market impact: News of the planned policy shift immediately affected markets. Nvidia's shares rose 3 percent after the announcement. Since April, AI chip makers have seen stock market swings due to Trump's policy announcements on tariffs.
• Changing face of chip export controls: The Biden-era chip restriction framework had a three-tiered system. Commerce Department officials now don't like it and consider it unenforceable. There is no timeline for the new rule, and they are still debating the best approach. It is suggested that the Trump administration might adopt a global licensing system with government-to-government agreements instead of the tiered approach, but the debate is ongoing and no timetable has been set.