Biden’s controversial AI Diffusion rules, which were set to restrict the sale of American GPUs and AI accelerators beginning this week, are officially dead.
The US Commerce Department on Tuesday followed through on its earlier promise to rescind the export controls on the basis that they would have “stifled American innovation and saddled companies with burdensome new regulatory requirements.”
“The AI Diffusion Rule also would have undermined US diplomatic relations with dozens of countries by downgrading them to second-tier status,” the statement read.
The Framework for Artificial Intelligence Diffusion, issued in the final days of the Biden administration, aimed to cap the sale of AI chips to most countries outside the US and a select few allies.
The hope was the rules would force affected nations to enact security measures to prevent AI imports from being re-exported or smuggled into China.
While a few welcomed Biden-era restrictions, many US tech firms have pushed back against the rules, arguing that if countries can’t get the AI infrastructure they need from the US, they’ll get it from China instead.
The Trump administration now plans to blaze its own trail with plans to issue a replacement to the rules…eventually. Beyond some flowery language and nebulous promises to safeguard American national security interests, details remain light.
The Commerce Department also issued guidance warning about the dangers of infrastructure-as-a-service (IaaS) providers turning a blind eye to Chinese model builders setting up shop in their clouds.
While the US trade policy has blocked Chinese companies from importing America’s most sophisticated chips for years now, they’ve done little to prevent them from renting the infrastructure they need from cloud datacenters beyond its borders.
On Tuesday, the Commerce Department’s Bureau of Industry and Security (BIS) also issued a clarification to the Export Administration Regulations, warning that chipmakers may be subject to export controls when selling to foreign cloud providers.
These regulations already bar US persons – which include American cloud providers and datacenter operators – from knowingly engaging in services or contracts that would advance the development of AI models by adversarial nations for military intelligence or weapons development, without permission.
The update clarifies that chipmakers will also require Uncle Sam’s blessing before they sell accelerators to foreign IaaS providers, if they know those accelerators may be used by hostile nations for training AI models.
Basically, they’re reminding chipmakers that if their foreign IaaS clients are caught helping train models for the Chinese military, there will be hell to pay.
These controls aren’t limited to future exports of AI accelerators either. Going forward, “in-country transfers” of foreign cloud providers’ existing GPU stockpiles will require permission, if they know those chips will be used to train enemy AIs.
Alongside the guidance, the BIS also warned that using Huawei’s Ascend family of AI accelerators anywhere in the world violates US export controls, citing a high likelihood they were made with American tech without a license. They are among China’s most potent homegrown alternatives to Nvidia. ®
