Trump Rolls Back Biden Era 'AI Diffusion Rule' - What It Means for India, China?

The United States has officially scrapped the ‘AI diffusion rule’ that was introduced by the Biden administration, according to Reuters report. The rule restricted the export of advanced artificial intelligence (AI) chips, which limited the expansion of American technology across the world.

In addition, the US Commerce Department also stated that the use of Huawei Technologies Co’s Ascend AI chips anywhere in the world violates government’s export control. The move will escalate US efforts to curb technological advances in China amid the global AI race.

Speaking at the Saudi-US Investment Forum, David Sacks, the new White House lead on AI policy said,” The Trump administration has just announced that we will be rescinding what's known as the Biden diffusion rule... it literally restricted the diffusion or proliferation of American technology all over the world.”

He emphasised that the previous rule “unfairly” penalised allies as it misunderstood the nature of AI chip diversion. “Diffusion is not a risk with a friend like Saudi Arabia,” said Sacks as quoted by Reuters.

“We reject the Biden administration’s attempt to impose its own ill-conceived and counterproductive AI policies on the American people,” said Under Secretary of Commerce Jeffrey Kessler.

What Is AI Diffusion Rule?

The Biden administration introduced the “AI diffusion rule” as a part of a broader strategy to limit China’s access to high-end artificial intelligence. According to the rule, the countries were placed into three different tiers and there were limits on the number of chips those nations could import. Though the rule was never fully implemented, but it had raised concerns among global chipmakers and governments.

The regulation also aimed to block indirect access to advanced AI chips by countries deemed a security risk, mainly China. However, its broader scope which lumped nations like India, Mexico, and Portugal into a lower-priority category, faced backlash for being overly rigid and lacking diplomatic nuance. These countries were poised to face import caps, potentially showing their AI ambitions.

Will Its Reversal Help India?

This rollback of the AI diffusion rule is expected to benefit countries like India, which are building AI infrastructure. India has been seeking improved access to AI chips produced by giants like Nvidia, hence, the availability of cutting-edge AI hardware may play a crucial role in that effort.

The policy change suggests that there is a greater room for future cooperation in terms of exporting more American AI chips to developing countries. However, there is no formal announcement about new chip shipments to India as of now. The US has effectively removed India from the scope of its previously sweeping restrictions.