US reportedly contemplating sweeping new chip export controls

How, and if, the Trump administration plans to regulate the export of semiconductors has remained unclear since Donald Trump took office last year. Now, we have an idea of what the administration is thinking.

U.S. regulators have allegedly drafted rules that would require U.S. government approval to ship AI chips anywhere outside the U.S., according to Bloomberg, citing sources. This would give the U.S. significantly more control over companies like AMD and Nvidia.

TechCrunch reached out to AMD, Nvidia, and the U.S. Department of Commerce for comment.

In these drafted rules, companies and governments outside the U.S. would have to be granted approval by the U.S. Department of Commerce to purchase these chips. The review process would vary based on the size and scale of the potential purchase, Bloomberg reported.

For example, a small order by a company outside the U.S. may warrant a basic review while a sizable order could require the company’s corresponding government to get involved.

This could, of course, all change before a final announcement or ruling, but the proposal would represent significantly more government involvement than the AI Diffusion rule instituted under President Joe Biden. The Trump administration formally rescinded Biden’s diffusion regulation last May, less than a week before it was set to go into effect.

While this is the first inkling of what broad export restrictions would look like, it isn’t fully surprising that the Trump administration is looking for more government involvement as opposed to less based on how it has handled Nvidia’s potential exports to China. The Trump administration has flip flopped multiple times on whether or not the company could send its advanced AI chips to the Chinese market before deciding to allow exports if the U.S. Department of Commerce was able to approve the customers.

However, this oversight approach may end up hurting U.S. chip companies and the U.S.’s current dominance in the global AI market. If it becomes harder to source chips from the U.S., companies may increasingly turn to other sources especially as chip companies outside the U.S. continue to develop more advanced chips.

In Nvidia’s case, the export regulations already are hurting them. The semiconductor giant has not seen the return of its customers in China after nearly a year of uncertainty of whether or not they would keep access to the AI technology.