A number of press outlets, including Bloomberg are reporting that the Trump administration has revised restrictions put in place by the Biden administration on the export of powerful AI processors to foreign countries, legislation that has upset Nvidia and other chip makers.
Citing unnamed sources familiar with the matter, the repeal, which is not yet final, seeks to restructure a policy that created three broad tiers of countries for regulating the export of chips. The tiers our most permissive (tier 1), somewhat restrictive (tier 2), and most restrictive (tier 3).
The policy, referred to as the “AI diffusion rule,” is supposed to take effect on May 15, but sources told Bloomberg that the Trump administration will not enforce policy well it works out the details of a revision.
The changes are conveniently timed, since President Trump is preparing for a trip to the Middle East, where a number of countries — including Saudi Arabia and the United Arab Emirates — are in Tier 2 and they’re not happy with their inability to acquire the chips they need.
The diffusion rule was introduced in the final week of the Biden administration so it was pretty easy to overlook. The regulation in question — titled the Framework for Artificial Intelligence Diffusion — would have partially or heavily limited exports of AI chips to over 100 countries.
The restrictions were meant to prevent countries from bypassing U.S. export controls. Chipmakers like Nvidia criticized the rules, arguing it would open the door to Chinese competitors like Huawei as they develop and sell their own AI hardware by taking American technology out of the market.
Nvidia CEO Jensen Huang has been particularly noisy about this issue, telling CNBC earlier this month that the market for AI chips in China could reach $50 billion in the next couple of years, and it was important for U.S. firms to have access to that market.
And Nvidia has a dog in this fight. Biden banned Nvidia from selling its H20 chip in China, a move that cost the company $5.5 billion in writedowns. Nvidia’s most powerful chips, including the A100, H100, and B1100, are already banned from export to China, also from Biden-era restrictions.
In a posting on X, Daniel Newman, CEO of The Futurum Group, said not to pop the champagne corks yet. “I’m not saying that some of the diffusion rules could be favorable for NVIDIA as I think a number of the rules from the Biden admin did not accomplish what they were intended to. But reading into this, it seems rules will be replaced and I doubt China will be opened up quickly as we navigate some type of trade deal,” he wrote.
Bloomberg has reported that President Trump is interested in easing restrictions for the UAE, and the UAE has been pushing pretty hard for such new deal, and has promised to invest as much as $1.4 trillion over the next decade in U.S. technology.
President Trump’s Middle East trip runs from May 13 to May 16.
Source:: Network World