The Trump administration has, after much speculation, formally reversed the Biden administration’s AI Diffusion Rule. This decision is a watershed moment for the future of regulation of artificial intelligence in the United States. In May, they made this announcement public. More importantly, it clears a path for the first of several executive orders to be signed, most likely on July 23. The administration’s hope is to further entrench our country’s status as the global leader in AI technology, at home and abroad.
The newly introduced AI Action Plan emphasizes the need for the United States to impose strict export controls on sensitive technologies. It states, “America must impose strong export controls on sensitive technologies.” This directive is yet another sign that the administration deeply cares about protecting U.S. innovations. Most importantly, it seeks to ensure that adversaries can’t benefit from American innovation.
Under President Trump’s leadership the US is equally intent on achieving global dominance in AI. It aims to open up the U.S. AI market and maintain U.S. competitive advantage in AI market leadership. The strategic plan brings attention to America’s global leadership in areas like data center construction and computing hardware performance. “America currently is the global leader on data center construction, computing hardware performance, and models,” the plan asserts.
The AI Action Plan lays out a lot of high-minded and ambitious targets. It is very weak on specific details of how the administration will achieve these goals. This vagueness makes it hard to determine the feasibility of its proposals, especially when considering enforcement mechanisms for its proposed chip export restrictions. The administration seems keen to work together with other government entities, including the Department of Commerce and National Security Council. Ultimately, they want to be able to collaborate with the AI industry to create chip location verification capabilities.
The U.S. and our allies have used export controls to deny access to some of the most critical systems involved in chip fabrication. Still, hundreds of component subsystems are left completely unregulated. The Trump administration is meeting this gap by working to align more closely with our global allies on chip export restrictions. They are even floating the use of things like the Foreign Direct Product Rule and secondary tariffs as tools for enforcing compliance.
The Trump administration has moved the goalposts. They only recently granted special exceptions to semiconductor manufacturers such as Nvidia and AMD to begin peddling the AI chips they originally designed for China. It is a significant development, as it reverses previously made licensing limitations. Just a few months ago, those same rules would have meant that Nvidia couldn’t play in the Chinese race at all.
The administration’s emphasis on using its AI headstart to reestablish positive global relations fits with the administration’s overall strategy to build long-lasting, international coalitions. The strategy intends to close off our adversaries’ access to U.S. innovations and investments. This strategy to bring allies together is meant to help defeat challenges presented by our adversary nations collectively.
The Trump administration’s AI Action Plan calls for a Rebuilding the AI Initiative. This effort would aim to determine the most effective enforcement strategies for possible future restrictions of chip exports. This is foundational for our long term technological leadership and critical to ensure adversaries cannot take advantage of American innovation.
