US Commerce Dept Reportedly Withdraws Planned Rule On AI Chip Exports

The U.S. Department of Commerce reportedly retracted a proposed rule on AI chip exports on Friday, marking a shift in the nation’s strategy to regulate the global AI chip market. The rule’s draft was circulated among other agencies for feedback in late February. No explanation was given for the withdrawal. A Reuters report stated that the proposed regulation called “AI Action Plan Implementation” was uploaded to the Office of Information and Regulatory Affairs website on February 26 for review, but was later removed. The rule had proposed evaluating whether foreign nations investing in U.S. data centers or offering security assurances should be a requirement for exporting 200,000 or more chips. The Commerce Department did not immediately respond to Benzinga‘s request for comment. This move is the latest in a series of reversals by the Trump administration in its attempts to replace a framework released by the Joe Biden administration in January 2025 for exporting AI chips. Last week, the U.S. Commerce Department had itself signaled on X that any final rules would avoid the “burdensome” framework previously proposed — an early indication the rule was unlikely to survive intact. China Accelerates as Washington Stumbles The pullback stands in contrast to the Biden-era tiered framework, which exempted close U.S. allies from most restrictions while restricting China’s access to advanced semiconductors. In the meantime, China’s leading chipmakers are reportedly accelerating plans to scale up production of advanced semiconductors, aiming to meet surging demand from domestic AI developers despite ongoing U.S. export restrictions. This move could further intensify the competition in the global AI chip market and reshape the dynamics of the tech industry. The policy vacuum arrives at a critical moment: China’s leading chipmakers are reportedly accelerating plans to scale up production of advanced semiconductors to meet surging domestic AI demand — intensifying competitive pressure on Nvidia Inc. (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD), and the broader U.S. chip sector. Photo: Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.