"The halt of US restraints on 'AI Dissemination' has been sanctioned, yet fresh suggestions increase potential risks for exports linked to artificial intelligence"
The United States Department of Commerce's Bureau of Industry and Security (BIS) has formally rescinded the Biden Administration's Framework for Artificial Intelligence Diffusion (AI Diffusion Rule) and replaced it with a strategy that promotes American AI innovation globally while restricting AI-related technology from geopolitical adversaries.
In a significant move, BIS has issued new guidance focused on managing risks specific to AI chip exports, particularly related to advanced computing integrated circuits (ICs) from the People's Republic of China (PRC), including Huawei Ascend chips. The new guidance aims to prevent the use of US AI chips in training or inference for Chinese AI models and securing supply chains against diversion tactics.
The BIS has emphasised that any purchase or use of Huawei Ascend ICs would violate the EAR's General Prohibition 10 (GP 10). The new guidance also provides that such license restrictions apply to US persons that provide any "support" or perform any contract, service or employment when there is "knowledge" such activity will be used for, or may assist in, the training of AI models for or on behalf of parties headquartered in D:5 countries, including China, or Macau.
BIS has further highlighted activities that could require an export license where there is knowledge that the AI model will be used for WMD or military-intelligence end use, such as exports, reexports or transfers of advanced computing ICs and commodities. The guidance notably provides a non-exhaustive list of "red flags" and recommended due diligence practices to help companies evaluate potential export control evasion with respect to advanced computing ICs.
Looking forward, BIS intends to publish formal rules that will replace the rescinded diffusion rule, but the exact framework and timeline remain uncertain. The potential policy pathways for future US export controls on AI technologies include maintaining the current minimal control regime, creating a revised, risk-based export control framework, or implementing a strict, blanket diffusion control rule with possible bilateral opt-outs for trusted allies.
In summary, the current status is that AI-related export licensing requirements from the Biden AI Diffusion Rule are rescinded and unenforced. The future implications point to a more nuanced and potentially risk-based export control regime emphasising trusted partnerships and supply chain security rather than comprehensive blanket restrictions. The BIS continues to engage industry with guidance while preparing more tailored regulations.
[1] [https://www.bis.doc.gov/index.php/documents/regulations-and-guidance/doc_view/1634-bis-policy-statement-on-controls-that-may-apply-to-advanced-computing-integrated-circuits-and-other-commodities-used-to-train-ai-models/] [2] [https://www.law360.com/artificialintelligence/articles/1486410/us-to-rescind-biden-ai-diffusion-rule-as-bis-issues-new-guidance-on-ai-chip-exports] [3] [https://www.reuters.com/business/us-commerce-department-rescinds-biden-era-ai-diffusion-rules-2025-05-13/]
- The BIS's new guidance on AI chip exports emphasizes the risks associated with financing or tech companies, particularly fintech and fintech-related AI, when involved in the export of advanced computing integrated circuits from the People's Republic of China, as violations of the EAR's General Prohibition 10 may arise.
- With artificial intelligence and technology innovation at the forefront, the BIS aims to restrict AI-related technology from geopolitical adversaries, thereby requiring due diligence and adherence to export control regulations by firms in various sectors, including the fintech industry.
