US Commerce Department withdraws controversial AI chip exports rule requiring foreign investments

US gov't revokes controversial AI hardware export rule that would mandate investments from foreign companies -- new export rules are still in the works, though

AMD, Nvidia, other suppliers of AI accelerators may now celebrate. The U.S. Commerce Department revokes a proposed export rule for AI accelerators that would require foreign operators of massive AI clusters to invest in American AI infrastructure to obtain them, effectively making them twice as expensive for entities from Asia, Europe, and the Middle East, reports Reuters. The U.S. government is still working on a new set of export rules for AI hardware developed in America, but at least the controversial proposal has now been removed from the table. The draft rule was submitted for interagency feedback to the Office of Information and Regulatory Affairs (OIRA) website in late February as part of an initiative called 'AI Action Plan Implementation.' However, the entry disappeared from the regulatory tracking system on Friday without explanation. According to a U.S. official cited by Reuters, the proposal had never progressed beyond an early draft stage and therefore did not represent a finalized policy direction. After abandoning the U.S. Diffusion Rule last Spring, the Commerce Department has been working on a new AI hardware export framework that would both reinforce American dominance in AI technologies and standards and limit U.S. adversaries' access to these technologies. The proposed export framework outlined a tiered licensing system linked to planned computing capacity. Shipments involving relatively modest volumes -- up to 1,000 Nvidia GB300 GPUs -- would be eligible for an accelerated approval, enabling exporters to ship hardware with limited regulatory resistance. Medium-scale installations would first need to obtain pre-authorization from the U.S. Department of Commerce before formally applying for an export license. In addition, operators would be required to provide detailed operational transparency, including disclosure of business activities and infrastructure usage. Furthermore, to get an export license, the end customers would need to permit on-site inspections by U.S. authorities to verify compliance with export conditions. At the upper end of the spectrum, the rules envisioned special treatment for very large AI clusters, particularly those involving 200,000 Nvidia GB300 GPUs or more deployed by a single organization within one country. Such projects would likely require direct negotiations with the U.S. government, including intergovernmental national security assurances. In parallel, operators of these large installations would be mandated to invest in AI infrastructure located in the U.S. as part of the overall arrangement. The Commerce Department specifically noted that it was looking into formalizing the approach under which Cerebras and Nvidia were allowed to supply their AI accelerators to companies in the Middle East. Meanwhile, these export licenses granted to Cerebras and Nvidia to supply AI hardware to Saudi Arabia and the United Arab Emirates reportedly required the country to match every dollar spent on domestic AI infrastructure with a dollar invested in AI infrastructure in the U.S. If similar conditions were applied to other markets, companies deploying accelerators from AMD, Cerebras, Nvidia, and other vendors would have effectively faced their costs doubling, as each dollar invested in local AI capacity would have to be mirrored by an equivalent investment in the U.S. AI sector. The withdrawal of the new draft likely reflects internal disagreement about how to balance national security and expanding U.S. influence in the global AI market. However, it remains to be seen whether the next draft of the export rules framework will be stricter or more liberal to exporters of AI hardware and their customers outside of America. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

US Commerce Department withdraws planned rule on AI chip exports, government website shows

March 13 (Reuters) - The U.S. Department of Commerce on Friday withdrew its planned rule on AI chip exports, according ⁠to a government website. A draft of the rule, expected to govern global access to AI chips, had been sent to other agencies ⁠for feedback in late February. The posting provided no reason ⁠for the withdrawal. A spokeswoman for the Commerce department ⁠did not immediately respond to ⁠a request for comment. Reporting by Karen Freifeld; Editing by Chris Reese Our Standards: The Thomson Reuters Trust Principles., opens new tab

US Commerce Department withdraws planned rule on AI chip exports - The Economic Times

The department had sent a draft rule, to replace a January 2025 Biden-era regulation on global access to AI chips, to other agencies for feedback late last month.The US Commerce Department withdrew a planned rule on artificial-intelligence chip exports on Friday, the latest backpedaling by the Trump administration in its efforts to promote secure American AI dominance. The department had sent a draft rule, to replace a January 2025 Biden-era regulation on global access to AI chips, to other agencies for feedback late last month. A notification for ⁠the "AI ⁠Action Plan Implementation" rule was posted on the Office of Information and Regulatory Affairs website on February 26, saying the rule was pending review, before it was pulled on Friday. "This supposed rule was always a draft and remains a draft," a US official said in a statement when asked about the withdrawal. "All discussions that were previously reported were preliminary." Last spring, the Commerce Department said it was going to revoke and replace the Biden-era rule with a much simpler ⁠one that ensured American AI dominance, but no new regulation appeared. The latest Trump draft considered requiring investments by foreign countries in US data centers or security guarantees as a ⁠condition for granting exports of 200,000 chips or more, according to a document seen by Reuters last week. Foreign firms that wanted up to 100,000 chips would need to provide government-to-government assurances, the document said. The plan departed markedly from the Biden approach, which divided the world into three tiers: allies that could receive unlimited chips; much of the world, which was subject to limited numbers; and countries of concern that were blocked from receiving the coveted chips. The Biden rule capped a four-year effort by that administration to hobble China's access to advanced chips while maintaining US leadership in AI. A former official said on Friday that the withdrawal of the latest planned rule likely reflects differing ⁠views within the Trump administration on how to achieve global AI supremacy and address national security concerns. The Commerce Department posted on March 5 on X that it was "committed to promoting secure exports of the American tech stack." It said there were internal government discussions about formalizing the approach it took with deals to send US chips to Saudi Arabia and the United Arab Emirates, where both countries agreed to invest in the US But it said the department would not return to the Biden AI diffusion rule, which it described as burdensome.

US Commerce Dept Reportedly Withdraws Planned Rule On AI Chip Exports - Advanced Micro Devices (NASDAQ:AMD), NVIDIA (NASDAQ:NVDA)

The U.S. Department of Commerce reportedly retracted a proposed rule on AI chip exports on Friday, marking a shift in the nation's strategy to regulate the global AI chip market. The rule's draft was circulated among other agencies for feedback in late February. No explanation was given for the withdrawal. The ⁠Commerce Department did not immediately respond to Benzinga's request for comment. This move is the latest in a series of reversals by the Trump administration in its attempts to replace a framework released by the Joe Biden administration in January 2025 for exporting AI chips. Last week, the U.S. Commerce Department had itself signaled on X that any final rules would avoid the "burdensome" framework previously proposed -- an early indication the rule was unlikely to survive intact. China Accelerates as Washington Stumbles Photo: Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.