US weighs broad new restrictions on semiconductor chip exports

How and even whether the Trump administration intends to regulate semiconductor exports has remained uncertain since Donald Trump returned to office last year. A clearer picture is emerging of what the administration may be considering.

According to Bloomberg, citing sources, U.S. regulators have reportedly drafted rules requiring government approval for shipments of AI chips to any destination outside the United States. Such a framework would give Washington far greater control over companies such as Nvidia and AMD.

A spokesperson for the U.S. Department of Commerce offered the following statement: “The Commerce Department is committed to promoting secure exports of the American tech stack. We successfully advanced exports through our historic Middle East agreements, and there are ongoing internal government discussions about formalising that approach. Today, there was a report that we were returning to the AI diffusion rule. We will not. It was burdensome, overreaching, and disastrous.”

Under the draft rules, companies and governments outside the United States would need approval from the U.S. Department of Commerce to purchase these chips. Bloomberg reported that the review process would differ depending on the size and scale of the proposed transaction.

For instance, a relatively small purchase by a company outside the U.S. might undergo a simpler review. At the same time, a much larger order could require the buyer’s national government to review it.

Of course, the proposal could still change before any final announcement or official ruling is made. But if implemented, it would represent a much more hands-on level of government oversight than the AI Diffusion rule introduced during President Joe Biden’s administration. The Trump administration formally rescinded Biden’s diffusion regulation last May, less than a week before it had been scheduled to take effect.

Although this is the first real indication of what broader export controls might look like, it is not entirely surprising that the Trump administration appears to be leaning toward greater government involvement rather than less. That direction aligns with how it has managed Nvidia’s potential exports to China. The administration shifted its position multiple times on whether Nvidia should be allowed to sell advanced AI chips into the Chinese market before ultimately deciding that exports could proceed if the U.S. Department of Commerce approved the customers.

That said, this oversight-heavy approach could hurt American chipmakers and weaken the United States’ current lead in the global AI market. If U.S. chips become harder to obtain, buyers may increasingly look elsewhere, particularly as chipmakers outside the U.S. continue to develop more advanced alternatives.

In Nvidia’s case, export restrictions are already taking a toll. The semiconductor company has not regained its customer base in China after nearly a year of uncertainty over whether those buyers would continue to have access to its AI technology.