The United States Department of Commerce has withdrawn a proposed rule on artificial intelligence (AI) chips. The proposed rule would’ve restricted American chip companies like Nvidia, AMD and Intel from exporting chips without US approval. According to an update posted on the Office of Management and Budget website (seen by Bloomberg), the interagency review of the proposed regulation has concluded, and the measure will not move forward.The draft rule, which has now been withdrawn, had proposed tighter oversight of global shipments of advanced AI chips produced by companies such as Nvidia and AMD. The proposal had earlier been reported by Bloomberg and was seen as part of a broader attempt to define the Trump administration’s approach to global chip exports after replacing a regulatory framework introduced during the Biden Administration. Earlier, a US official from the Trump Administration told Bloomberg that the proposal remained a draft and that discussions around it were preliminary.
Why this withdrawal of the proposed AI chip rule is big relief for AMD and Nvidia
If the rule had come into effect, the US would have introduced a tiered approval system based on the computing power of chips exported for AI training and development. Companies purchasing larger volumes of advanced chips could have faced additional requirements, including commitments from their governments to support AI capacity in the United States.The now-abandoned proposal from the Trump Administration would have given the Commerce Department’s licensing office a role in reviewing, on a case-by-case basis, exports of AI chips from Nvidia and Advanced Micro Devices.According to the report, approvals under the proposal would have depended on several factors, including government-to-government agreements and the level of computing power requested by each end user.Responding to the previous Bloomberg report, the US Department of Commerce said last week that “we will not” return to the earlier administration’s AI diffusion framework, which it described as “burdensome, overreaching and disastrous.”Separately, US officials were also reportedly considering other changes to export policies for advanced AI chips. According to a previous report, the proposed rule could have required foreign governments to invest in US AI infrastructure in order to access larger shipments of chips used in AI data centres.Earlier, US President Donald Trump told Jensen Huang that export licences would be approved. As part of the arrangement, Nvidia agreed to transfer 25% of the revenue from H200 chip sales in China to the US government.
