[News] Trump Axes Biden’s AI Diffusion Framework, Targets Huawei, China’s AI Models and Chip Diversion

Before Biden’s AI chip rules kick in on May 15, Trump slams the brakes, and Washington is now zeroing in on Chinese AI chips and models. According to Bloomberg and the U.S. Bureau of Industry and Security, the agency clarified that using Huawei’s Ascend AI chips anywhere breaches US export rules and warned against US chips aiding China’s AI development.

Target 1: Huawei’s Ascend chips

The revised AI Diffusion Rule, as highlighted by Wccftech, targets three key areas. First: Huawei’s Ascend chips. The report notes that for the first time, they’re named in official documents, and Trump now states that using these chips globally may violate US controls, aiming to confine their reach to China.

Following export curbs on NVIDIA’s H20 to China, Huawei has been making strides on Ascend AI chips, with several products hitting the market soon.

According to the Wall Street Journal, Huawei has contacted several Chinese tech companies to evaluate the technical feasibility of its new chip, the Ascend 910D, and is expected to receive the first batch of samples as early as late May. Another report from China’s mydrivers revealed that Huawei is also working on Ascend 920, which aims to kick off mass production in 2H25.

Huawei’s ambitions go even further. According to TheElec, Huawei is reportedly running at least 11 semiconductor fabs in China, with plans to grow that number to 20. These cover memory, system chips, and foundry lines—marking its push to become China’s own Samsung or Intel, the report adds.

Target 2: U.S. Chips in China’s AI Models

As the BIS tightens export controls for overseas AI chips, it also plans to issue guidance warning against U.S. AI chips being used to train Chinese models.

Wccftech reports that U.S. chips—especially NVIDIA’s—will face stricter tracking. Tech like location tags or kill switches could be on the way, backed by a Senate bill in progress, the report indicates.

The Register reported that Senator Tom Cotton has proposed the Chip Security Act last Friday, which would require advanced chips to include location tracking within six months of the bill’s passage. It would also mandate exporters to report any misuse or tampering to the BIS, as per the report.

Target 3: Chip Diversion

In addition, the new AI Diffusion Rule will also include guidance to U.S. companies on how to protect supply chains against diversion tactics, as per the BIS press release.

According to Bloomberg, the new rules could target countries like Malaysia and Thailand for diverting chips to China.

Who Is Set to Benefit?

As noted by Bloomberg, during 2022 and 2023, the US has expanded chip export controls to over 40 countries. Notably, Bloomberg highlights that Biden’s three-tier framework also capped shipments to places like the UAE and Saudi Arabia, which already needed US approval for advanced chips. For the first time, it also imposed chip controls on countries like India, Malaysia, and Poland.

However, while the Commerce Department said Biden’s AI rules risked straining ties by labeling key partners as second-tier, the new plan could open the door for other countries to strike their own chip deals, shaped by investment, trade, or diplomacy, the report suggests.

It could be a sign that several U.S. tech companies unveiled AI deals in the Middle East on Tuesday, coinciding with President Trump securing $600 billion in commitments from Saudi Arabia during his Gulf tour, according to Reuters.

The report adds that among the major agreements, NVIDIA will sell hundreds of thousands of AI chips to Saudi Arabia, starting with 18,000 of its latest “Blackwell” chips for Humain, an AI startup backed by the Saudi sovereign wealth fund. Meanwhile, AMD has partnered with Humain in a $10 billion deal, as per Reuters.

Read more

• [News] If Trump Scraps AI Diffusion Rules: 3 Things to Watch – Chip Diversion, Middle East Moves and More
• [News] U.S. AI Chip Controls Are Coming— A Breakdown of the Tiered Restrictions

(Photo credit: The White House)