Trump Administration Considers Revising Biden's AI Chip Export Rule

Exclusive: Trump officials eye changes to Biden's AI chip export rule, sources say

NEW YORK, April 29 (Reuters) - The Trump administration is working on changes to a Biden-era rule that would limit global access to AI chips, including possibly doing away with its splitting the world into tiers that help determine how many advanced semiconductors a country can obtain, three sources familiar with the matter said. The sources said the plans were still under discussion and warned they could change. But if enacted, removing the tiers could open the door to using U.S. chips as an even more powerful negotiating tool in trade talks. The regulation, which was issued in January, is aimed at dividing up access to the most advanced AI chips and controlling certain model weights in order to keep the most sophisticated computing power in the United States and among its allies, and away from China and other countries of concern. The Framework for Artificial Intelligence Diffusion, as the rule is called, was issued by the U.S. Department of Commerce in January, a week before the end of the administration of former President Joe Biden. Companies must comply with its restrictions starting on May 15. Currently, the rule has the world divided into three tiers. Seventeen countries and Taiwan in the first tier can receive unlimited chips. Some 120 other countries are in the second tier, which leaves them subject to caps on how many AI chips they can get. And countries of concern like China, Russia, Iran and North Korea in the third tier are blocked from the chips. But Trump administration officials are weighing discarding the tiered approach to access in the rule and replacing it with a global licensing regime with government-to-government agreements, the sources said. "There are some voices pushing for elimination of the tiers," Wilbur Ross, who served as Commerce secretary during the first Trump administration, said in an interview on Tuesday. "I think it's still a work in progress." He said government-to-government agreements were one alternative. Such a structure would likely tie in to President Donald Trump's broader trade strategy of making deals with individual countries, one of the sources said. That would make it easier for the U.S. to use access to American-designed chips as leverage in other negotiations. U.S. Commerce Secretary Howard Lutnick said at a conference in March that he wants to include export controls in trade talks. Other possible changes include a lower threshold for an exception to licensing. Under the current rule, orders under the equivalent of about 1,700 of Nvidia's (NVDA.O), opens new tab powerful H100 chips do not count toward country caps and only require the government be notified about the order. No license is necessary. The Trump administration is considering making the cutoff orders under the equivalent of 500 H100 chips, one source said. A spokesperson for the Commerce Department declined comment. A spokesperson for the White House did not immediately respond to a request for comment. For months, Trump administration officials have suggested they want to make the rule "stronger but simpler," but at least some experts believe removing the tiers will make the rule more complicated. Ken Glueck, executive vice president at Oracle (ORCL.N), opens new tab, a critic of the current rule, said that the tiers did not make sense, noting that Israel and Yemen were both in the second tier. "Wouldn't surprise me they're going to take a new look at this," said Glueck, who said he did not know the Trump administration's plan but expects the rule to be modified in a significant way. Oracle and Nvidia were both outspoken in their criticism of the new rule when it was issued in January. Industry has argued that by limiting access to the chips, countries will buy the technology from China. Some U.S. lawmakers have agreed. Seven Republican senators sent a letter to Lutnick in mid-April asking for the rule to be withdrawn. The restrictions would incentivize buyers, especially in Tier 2 countries, to turn to China's "unregulated cheap substitutes," the letter said. Reporting by Karen Freifeld in New York; Additional reporting by Alexandra Alper in Washington. Editing by Chris Sanders and Matthew Lewis. Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

Exclusive-Trump Officials Eye Changes to Biden's AI Chip Export Rule, Sources Say

NEW YORK (Reuters) -The Trump administration is working on changes to a Biden-era rule that would limit global access to AI chips, including possibly doing away with its splitting the world into tiers that help determine how many advanced semiconductors a country can obtain, three sources familiar with the matter said. The sources said the plans were still under discussion and warned they could change. But if enacted, removing the tiers could open the door to using U.S. chips as an even more powerful negotiating tool in trade talks. The regulation, which was issued in January, is aimed at dividing up access to the most advanced AI chips and controlling certain model weights in order to keep the most sophisticated computing power in the United States and among its allies, and away from China and other countries of concern. The Framework for Artificial Intelligence Diffusion, as the rule is called, was issued by the U.S. Department of Commerce in January, a week before the end of the administration of former President Joe Biden. Companies must comply with its restrictions starting on May 15. Currently, the rule has the world divided into three tiers. Seventeen countries and Taiwan in the first tier can receive unlimited chips. Some 120 other countries are in the second tier, which leaves them subject to caps on how many AI chips they can get. And countries of concern like China, Russia, Iran and North Korea in the third tier are blocked from the chips. But Trump administration officials are weighing discarding the tiered approach to access in the rule and replacing it with a global licensing regime with government-to-government agreements, the sources said. "There are some voices pushing for elimination of the tiers," Wilbur Ross, who served as Commerce secretary during the first Trump administration, said in an interview on Tuesday. "I think it's still a work in progress." He said government-to-government agreements were one alternative. Such a structure would likely tie in to President Donald Trump's broader trade strategy of making deals with individual countries, one of the sources said. That would make it easier for the U.S. to use access to American-designed chips as leverage in other negotiations. U.S. Commerce Secretary Howard Lutnick said at a conference in March that he wants to include export controls in trade talks. Other possible changes include a lower threshold for an exception to licensing. Under the current rule, orders under the equivalent of about 1,700 of Nvidia's powerful H100 chips do not count toward country caps and only require the government be notified about the order. No license is necessary. The Trump administration is considering making the cutoff orders under the equivalent of 500 H100 chips, one source said. A spokesperson for the Commerce Department declined comment. A spokesperson for the White House did not immediately respond to a request for comment. For months, Trump administration officials have suggested they want to make the rule "stronger but simpler," but at least some experts believe removing the tiers will make the rule more complicated. Ken Glueck, executive vice president at Oracle, a critic of the current rule, said that the tiers did not make sense, noting that Israel and Yemen were both in the second tier. "Wouldn't surprise me they're going to take a new look at this," said Glueck, who said he did not know the Trump administration's plan but expects the rule to be modified in a significant way. Oracle and Nvidia were both outspoken in their criticism of the new rule when it was issued in January. Industry has argued that by limiting access to the chips, countries will buy the technology from China. Some U.S. lawmakers have agreed. Seven Republican senators sent a letter to Lutnick in mid-April asking for the rule to be withdrawn. The restrictions would incentivize buyers, especially in Tier 2 countries, to turn to China's "unregulated cheap substitutes," the letter said. (Reporting by Karen Freifeld in New York; Additional reporting by Alexandra Alper in Washington. Editing by Chris Sanders and Matthew Lewis.)

Donald Trump officials eye changes to Biden's AI chip export rule, sources say

The Framework for Artificial Intelligence Diffusion, as the rule is called, was issued by the US Department of Commerce in January, a week before the end of the administration of former President Joe Biden. Companies must comply with its restrictions starting on May 1The Trump administration is working on changes to a Biden-era rule that would limit global access to AI chips, including possibly doing away with its splitting the world into tiers that help determine how many advanced semiconductors a country can obtain, three sources familiar with the matter said. The sources said the plans were still under discussion and warned they could change. But if enacted, removing the tiers could open the door to using US chips as an even more powerful negotiating tool in trade talks. The regulation, which was issued in January, is aimed at dividing up access to the most advanced AI chips and controlling certain model weights in order to keep the most sophisticated computing power in the United States and among its allies, and away from China and other countries of concern. The Framework for Artificial Intelligence Diffusion, as the rule is called, was issued by the US Department of Commerce in January, a week before the end of the administration of former President Joe Biden. Companies must comply with its restrictions starting on May 15. Currently, the rule has the world divided into three tiers. Seventeen countries and Taiwan in the first tier can receive unlimited chips. Some 120 other countries are in the second tier, which leaves them subject to caps on how many AI chips they can get. And countries of concern like China, Russia, Iran and North Korea in the third tier are blocked from the chips. But Trump administration officials are weighing discarding the tiered approach to access in the rule and replacing it with a global licensing regime with government-to-government agreements, the sources said. "There are some voices pushing for elimination of the tiers," Wilbur Ross, who served as Commerce secretary during the first Trump administration, said in an interview on Tuesday. "I think it's still a work in progress." He said government-to-government agreements were one alternative. Such a structure would likely tie in to President Donald Trump's broader trade strategy of making deals with individual countries, one of the sources said. That would make it easier for the U.S. to use access to American-designed chips as leverage in other negotiations. US Commerce Secretary Howard Lutnick said at a conference in March that he wants to include export controls in trade talks. Other possible changes include a lower threshold for an exception to licensing. Under the current rule, orders under the equivalent of about 1,700 of Nvidia's powerful H100 chips do not count toward country caps and only require the government be notified about the order. No license is necessary. The Trump administration is considering making the cutoff orders under the equivalent of 500 H100 chips, one source said. A spokesperson for the Commerce Department declined comment. A spokesperson for the White House did not immediately respond to a request for comment. For months, Trump administration officials have suggested they want to make the rule "stronger but simpler," but at least some experts believe removing the tiers will make the rule more complicated. Ken Glueck, executive vice president at Oracle, a critic of the current rule, said that the tiers did not make sense, noting that Israel and Yemen were both in the second tier. "Wouldn't surprise me they're going to take a new look at this," said Glueck, who said he did not know the Trump administration's plan but expects the rule to be modified in a significant way. Oracle and Nvidia were both outspoken in their criticism of the new rule when it was issued in January. Industry has argued that by limiting access to the chips, countries will buy the technology from China. Some U.S. lawmakers have agreed. Seven Republican senators sent a letter to Lutnick in mid-April asking for the rule to be withdrawn. The restrictions would incentivize buyers, especially in Tier 2 countries, to turn to China's "unregulated cheap substitutes," the letter said.

Trump Administration Plans On "Centralizing" AI Compute Power By Changing The AI Diffusion Rule; Expected To Implement a "Global Licensing Regime"

Well, it seems like the Trump administration won't proceed with Biden's AI diffusion rule as it is; rather, a change is expected that would likely give the US an unfair edge. Trump and his Commerce Secretary, Howard Lutnick, have taken AI supremacy as a matter of national security and have plans to use the technology as leverage to secure trade deals. In a report by Reuters, it is claimed that the US administration plans to change the Biden-era AI Diffusion rule, which is set for implementation by May 15. Instead of splitting countries into different tiers, the government plans to revise the rule to make the US a more dominant negotiating party. The AI Diffusion rule initially divided the countries to which NVIDIA's advanced AI GPUs can be exported into three categories. The first is a list of nations that are either aligned with US national security objectives or are not a threat to the US. These countries can secure the chips without any hindrance. The second category consists of hostile nations such as Russia and Iran, which are entirely barred from procuring either US-origin GPUs or AI software. Finally, the third category limits countries like India from importing large amounts of GPUs without scrutiny. Now, instead of limiting the opportunity to access the chips of nations, the administration is replacing it with a licensing scheme, which means that countries looking to access cutting-edge AI chips from the US would need a license. Ultimately, this will allow the Trump administration to nitpick which country they would want AI chips exported to, and it could be used as a negotiation tool as well, which means that the US President will have the cards to play out. Another possibility is to set a threshold for an exception to licensing. It is claimed that the administration is looking towards a "500 H100 chip" limit, after which getting a license would become mandatory. With this policy being implemented, it is clear that companies like NVIDIA will suffer a lot, given that their market presence in "unfavoured regions" by the US will be reduced dramatically, and this includes China as well. Nothing is official for now, but given that the policy's deadline is approaching soon, we are expected to see a formal announcement on the AI Diffusion rule in the coming days.

Trump officials eye changes to Biden's AI chip export rule

The Trump administration is working on changes to a Biden-era rule that would limit global access to AI chips, including possibly doing away with its splitting the world into tiers that help determine how many advanced semiconductors a country can obtain, three sources familiar with the matter said. The sources said the plans were still under discussion and warned they could change. But if enacted, removing the tiers could open the door to using U.S. chips as an even more powerful negotiating tool in trade talks. The regulation, which was issued in January, is aimed at dividing up access to the most advanced AI chips and controlling certain model weights in order to keep the most sophisticated computing power in the United States and among its allies, and away from China and other countries of concern.

Trump Administration Targets Biden-Era AI Chip Curbs, Could Scrap Country Tiers And Tighten Access To Nvidia's H100 Chips: Report - NVIDIA (NASDAQ:NVDA)

The Donald Trump administration is reportedly considering sweeping changes to Joe Biden-era restrictions on AI chip exports. What Happened: Trump officials are weighing a significant overhaul of the Framework for Artificial Intelligence Diffusion, a rule issued in January by the U.S. Commerce Department under former President Joe Biden, reported Reuters on Tuesday, citing three sources familiar with the matter. The rule currently splits the world into three tiers to determine how many advanced AI chips countries can access. Tier 1 nations, including 17 allies and Taiwan, have unlimited access. Tier 2 countries -- about 120 in total -- face caps, while Tier 3 nations like China, Russia and North Korea are completely blocked. As per the report, the Trump administration is considering replacing this tiered structure with a global licensing regime, which would rely on individual government-to-government agreements to manage chip exports. See Also: Mark Cuban Slams Amazon For 'Ripping Off American Sellers' As Trump Tariffs Are Predicted To Boost Ecommerce Brands' Profits "There are some voices pushing for elimination of the tiers," said former Commerce Secretary under Trump, Wilbur Ross, on Tuesday. "I think it's still a work in progress." Another change under discussion includes lowering the exemption threshold for chip orders. Currently, purchases under the equivalent of 1,700 Nvidia Corporation's NVDA H100 chips don't require a license -- only notification. The Trump team is reportedly considering cutting that threshold to 500. Why It's Important: Commerce Secretary Howard Lutnick previously signaled openness to using export controls in trade negotiations, aligning with Trump's broader foreign policy strategy of leveraging U.S. assets in bilateral deals. Earlier this week, Zhao Chenxin, vice chairman of China's National Development and Reform Commission (NDRC), said he is "fully confident" that they will achieve their 5% growth target for 2025, despite increasing economic headwinds and analyst warnings of a potential slowdown. Meanwhile, Torsten Slok, chief economist at Apollo Global Management, an American asset management fund, has estimated a "90% chance" of recession if current tariff levels persist -- echoing growing concerns among global financial experts. Nvidia's growth score ranks in the 94th percentile, according to Benzinga Edge Stock Rankings. Want to see how other chipmakers stack up? Click here to explore the full list. Photo Courtesy: Hepha1st0s/ Shutterstock Read Next: What Caused Sam Altman-Founded World Network Token To Soar 57% in a Week? What Caused Sam Altman-Founded World Network Token To Soar 57% in a Week? Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. NVDANVIDIA Corp$106.77-1.80%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum63.64Growth94.83Quality97.45Value7.28Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Nvidia stock dips amid Reuters report on AI chip export rule review By Investing.com

Investing.com -- Shares of Nvidia (NASDAQ:NVDA) edged lower, but remained higher by 0.5% as the market responded to a report from Reuters that Trump administration officials are considering changes to a Biden-era AI chip export rule. The potential revision could impact how advanced semiconductors are distributed globally, stirring a cautious reaction among investors. The current regulation, introduced by the U.S. Department of Commerce in January, categorizes countries into three tiers, determining their access to cutting-edge AI chips. The rule aims to maintain the most sophisticated computing power within the United States and amongst its allies, while restricting access to nations such as China and Russia. The regulation is set to take effect on May 15, requiring compliance from companies like Nvidia. However, Trump officials are now debating the removal of this tiered system in favor of a global licensing regime that could involve government-to-government agreements. This approach aligns with President Donald Trump's trade strategy, which emphasizes bilateral deals and could leverage access to U.S.-designed chips in negotiations. The proposed changes also include lowering the threshold for licensing exceptions. Presently, orders below approximately 1,700 of Nvidia's H100 chips are exempt from country caps and do not necessitate a license, only notification to the government. The Trump administration is contemplating reducing this cutoff to orders under 500 H100 chips. These potential policy shifts have brought uncertainty to the semiconductor industry, which has previously expressed concerns over the rule's implications. Critics argue that the restrictions could drive countries, particularly those in the second tier, to seek alternatives from China, which offers less regulated and more affordable options. The review of the AI chip export rule comes at a time when the geopolitical landscape and trade relations are particularly sensitive. The outcome of these discussions could have significant ramifications for Nvidia and the broader semiconductor sector, as access to advanced chips is a crucial component of technological development and national security strategies.