US Rescinds AI Chip Rule, Plans New Export Controls and Cybersecurity Group

The U.S. Commerce Department has rescinded the Biden Administration's AI Diffusion Rule, which was set to take effect in May 2025 and aimed to cap AI chip shipments to specific countries. The department stated the rule would stifle American innovation and burden companies. Under Secretary of Commerce for Industry and Security, Jeffrey Kessler, instructed enforcement officials not to enforce the rescinded rule, indicating a strategy to restrict access for adversaries while advancing AI technology with trusted partners.

In conjunction with the rescission, the Bureau of Industry and Security (BIS) announced additional measures to bolster export controls on semiconductors globally. This includes issuing guidance to the industry regarding the risks associated with People's Republic of China (PRC) advanced computing integrated circuits, specifically mentioning Huawei Ascend chips. Guidance has also been provided to U.S. companies on safeguarding their supply chains against diversion tactics, emphasizing the protection of U.S. AI chips from being used in the training and inference of Chinese AI models.

Separately, the U.S. will establish a group to coordinate information about cybersecurity vulnerabilities raised by AI systems, fulfilling a June executive order from President Donald Trump. Software companies, AI companies, and critical infrastructure providers will use this group to communicate identified vulnerabilities and develop responses. U.S. official Jeffrey Kessler stated that minimal exports of Nvidia H200 chips have reached China so far, with shipments having begun but in very few numbers.