The US Commerce Department is weighing a new regulatory framework for artificial intelligence chip exports that would require foreign nations to invest in US AI data centers or provide security guarantees as a condition for receiving shipments of 200,000 chips or more, according to a draft document seen by Reuters.
The rules are not final and could change. They would mark the first attempt to regulate AI chip flows to US allies and partners since the Trump administration rescinded its predecessor's so-called AI diffusion rules, which sought to keep a significant share of AI infrastructure buildout in the US and route most purchases through a handful of US cloud computing companies.
If adopted, the proposal gives the administration leverage to negotiate investments in the US, one of Trump's top priorities, as it decides how many AI chips to grant each country. The Commerce Department confirmed on social media that it was debating new rules, but said they would not resemble the "burdensome, overreaching, and disastrous" framework proposed by the previous administration. Instead, the department said it would follow the mold of deals sending US chips to Saudi Arabia and the United Arab Emirates, where both countries agreed to invest in the US.
What the Draft Would Require
Even small chip installations of fewer than 1,000 chips could need a license, according to the draft seen by Reuters. To qualify for an exemption, the exporter, such as Nvidia or Advanced Micro Devices, would have to monitor the chips, and the recipient would have to agree to use software that prevents the chips from being linked into a cluster, the industry term for large groups of chips.
Foreign firms seeking up to 100,000 chips would need government-to-government assurances, the document said. The Trump administration already required Saudi Arabia to provide such assurances to purchase advanced chips. Installations of up to 200,000 chips could also require visits from US export control officials.
The draft does not address exports of model weights, the key parameters of an AI system that companies such as OpenAI and Anthropic guard as competitive secrets. The Biden rule had placed restrictions on model weights to ensure the most advanced AI was developed and deployed in trusted and secure environments.
A Break From the Biden Approach
The proposal departs markedly from former President Joe Biden's approach, which rested on the premise that close US allies should be exempt from most restrictions on exports of the coveted chips. The new framework applies globally, including to allied nations, and would not affect blacklisted countries such as Russia, which cannot obtain US AI chips under rules set by the Biden administration.
China, which was among those blacklisted countries, received a green light in December to receive Nvidia's second-most advanced AI chips. Those shipments have been held up by national security requirements that could convince China not to go through with the purchases.
"The rule could help the US government address chip diversion to China and ensure a more secure buildout of the most powerful AI supercomputers," said Saif Khan, a former national security official in the Biden administration now at the Institute for Progress, a Washington think tank. "But the license requirements are overly broad, applying globally, raising concerns that the administration intends to use the controls as negotiation leverage with allies rather than for security."
The Commerce Department said it 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 formalizing that approach."
What It Means for Chipmakers and Buyers
Nvidia and Advanced Micro Devices, the two firms named in the draft as exporters, did not immediately respond to requests for comment. The White House did not immediately respond either. For chipmakers, the rules introduce fresh uncertainty into an already shifting export landscape, since licensing thresholds now reach down to installations of fewer than 1,000 chips.
For foreign buyers, the stakes are higher. A country seeking 200,000 chips or more would face investment or security demands plus possible on-site inspections. Nations that previously qualified for allied exemptions would now negotiate terms case by case, much like Saudi Arabia and the UAE did in their Middle East deals.
It is not clear this will hold. The rules are a draft, the Commerce Department has already withdrawn one planned AI chip export rule this year, and the agency has signaled it wants a lighter touch than the Biden framework. The final shape could look different from what the draft describes.
The Stakes Beyond the Chips
The export debate sits at the center of a broader contest over who builds the next generation of AI infrastructure and where. Keeping chip buildout in the US was a stated goal of the Biden diffusion rules, and the Trump approach keeps that goal while swapping exemptions for negotiation leverage.
For US allies, the shift means AI capacity plans now depend on bilateral deals with Washington rather than on a predictable rules-based exemption. For China, the December green light for Nvidia's second-most advanced chips remains stalled, and the new framework does not appear to change that.
The story is still moving. Reporting by Alexandra Alper and Stephen Nellis in Reuters, with editing by Chris Sanders and David Gregorio. See the original Reuters report for the underlying document and full sourcing.
The semiconductor supply chain adds another layer. Export controls do not just affect chip designers; they ripple through foundries, packaging houses, and equipment makers that depend on predictable demand from global buyers. If allied nations face case-by-case licensing for orders above 100,000 chips, planning for advanced packaging and high-bandwidth memory capacity gets harder, since those investments are sized years in advance.
Memory suppliers are watching closely. High-bandwidth memory has become a binding constraint on AI accelerator shipments, and any rule that slows large-scale deployment in allied markets could soften demand forecasts for the newest memory generations. That would not stop the buildout, but it would change its timing and geography.
Equipment makers face a different question. Tools that enable leading-edge nodes are already restricted for China; a broader licensing regime for allies adds paperwork but not necessarily new prohibitions. The risk is administrative friction: licenses that take months rather than weeks, and uncertainty about whether an order placed today ships next quarter.
There is also a diplomatic cost. Allies that invested in US-aligned AI strategies expecting a rules-based exemption now face bilateral negotiations. That approach secured Saudi and UAE investment, but it scales poorly across dozens of partners. Each negotiation consumes diplomatic bandwidth and may produce inconsistent terms.
The draft's monitoring and clustering restrictions add technical complexity. Requiring software that prevents chips from being linked into larger clusters means exporters must verify deployment configurations, not just ship hardware. For Nvidia and AMD, that is a new compliance obligation layered on top of existing export checks.
Whether the framework survives contact with reality is an open question. The Commerce Department withdrew a planned AI chip export rule on March 13, and the agency has said it wants to avoid the previous administration's approach. A finalized rule could be narrower than the draft, or it could be shelved entirely.
For now, the signal is clear: the US intends to use AI chip access as a lever for investment and security commitments, and allies should plan for negotiations rather than exemptions.
More semiconductor coverage is available in our semiconductors category.
What happens next depends on whether the Commerce Department finalizes the draft or pulls it back again, as it did with the earlier rule withdrawn on March 13. Either outcome reshapes how Nvidia and AMD plan shipments for the rest of the year.