The rules of the global AI arms race just got a massive facelift. If you've been tracking the back-and-forth between Washington and Silicon Valley, you know the vibe has been tense for years. But now, it's official: the Trump administration is moving to replace Biden-era AI chip export curbs with something radically different.
Honestly, the old "AI Diffusion Rule" that the Biden team tried to push through in its final days is basically dead in the water. That rule was supposed to create a complex, three-tier system for the whole world. It would have capped how many chips countries like the UAE or India could buy based on their "risk level."
Trump’s Commerce Department called it "unworkable" and "bureaucratic." They’ve officially rescinded it. Instead of blanket caps on over 120 nations, we’re looking at a "pay-to-play" model that prioritizes American revenue and "AI dominance" over total isolation.
The End of the AI Diffusion Rule
The Biden administration’s strategy was rooted in a philosophy of containment. They wanted to ensure that advanced semiconductors—the kind Nvidia and AMD make—didn't leak into the wrong hands by putting a leash on almost everyone. On May 13, 2025, the Trump administration hit the delete key on that plan.
Commerce Undersecretary Jeffery Kessler has been pretty vocal about this. The new goal? A "bold, inclusive strategy." Basically, they want to sell chips to "trusted partners" through direct bilateral agreements rather than making every country jump through the same hoops.
Why the sudden shift? For one, the big chipmakers were screaming. Nvidia and AMD were looking at billions in lost revenue. Nvidia alone estimated they could lose upwards of $5.5 billion if those Biden-era caps stayed in place. When the news of the rescission broke, Nvidia’s stock jumped 3%. Investors clearly liked what they heard.
How the New "Trump Fee" Works
This is where things get interesting—and a little weird. Instead of just saying "yes" or "no" to exports, the Trump administration is treating AI chips a bit like a high-end export commodity that the government gets a cut of.
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On January 13, 2026, the Department of Commerce published a regulation that essentially greenlights the sale of Nvidia’s H200 chips to China. But there’s a catch. A big one.
- The 25% Government Cut: President Trump signed a proclamation imposing a 25% tariff/fee on these high-end chips. He literally said, "We’re going to be making 25 percent on the sale of those chips."
- The 50% Volume Cap: You can’t just flood China with chips. The number of H200s (or AMD MI325X equivalents) sent to China cannot exceed 50% of the volume shipped to U.S. customers.
- Domestic Priority: Exporters have to certify that shipping to China won't cause "any delay" for American buyers. America first, literally.
It’s a massive pivot from the Biden era's "small yard, high fence" approach. Now, the fence has a toll booth.
What Most People Get Wrong About the China "Ban"
There’s a common misconception that the Trump administration is just "opening the floodgates." That's not really true. While they are allowing the H200 to go to China, they are still holding back the "crown jewels."
The ultra-powerful Blackwell and the upcoming Rubin architectures are still off-limits for Chinese buyers. Trump’s logic is that the H200 is "pretty good," but since it's already been surpassed by newer tech in the U.S., it's not a catastrophic security risk to sell it—especially if the U.S. government is pocketing a massive fee on every unit.
But not everyone is happy. China hawks in the Senate are worried that selling 1 or 2 million H200s to Beijing will still give them enough "compute" to supercharge their military AI. Analysts at the Council on Foreign Relations have called the policy "strategically incoherent," arguing that you can’t really "manage" the risk of chips this powerful once they land on foreign soil.
The Impact on Global Tech Hubs
The death of the Biden-era caps is a huge relief for places like Malaysia, India, and the Middle East. Under the old rules, these countries were worried they’d be treated as "second-tier" tech powers.
Now, countries like Saudi Arabia and the UAE are seeing a path toward building their own massive data centers with American silicon. Oracle, for example, has been planning a massive expansion in Malaysia that would have been crippled by the old export caps. Now? It’s full steam ahead, provided they play by the new bilateral rules.
Actionable Insights for the Tech Sector
If you're in the semiconductor supply chain or running a high-growth tech startup, the landscape just shifted. Here is how you should navigate it:
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- Watch the "Revenue-Share" Model: If you're exporting high-end hardware, expect the government to ask for a cut. This 25% fee on AI chips might eventually expand to other sectors like quantum computing or high-end robotics.
- Bilateral is King: Don't wait for a global rulebook. The Trump administration prefers one-on-one deals with countries. If your business operates in a specific region (like South Asia), look for the specific trade agreements being inked between that country and Washington.
- Third-Party Testing is the New Normal: The new rules require chips to undergo independent, third-party testing in the U.S. before they ship out. This adds a new layer to your logistics timeline—factor in at least an extra 4-6 weeks for compliance checks.
- Domestic Inventory Certifications: You now have to prove you aren't short-changing U.S. customers. Keep your domestic delivery receipts and order logs pristine; the Bureau of Industry and Security (BIS) is going to be auditing these "U.S. Supply Certifications" closely.
The "Trump administration to replace Biden-era AI chip export curbs" move isn't just about deregulation. It’s about re-regulation with a focus on monetization and domestic priority. It’s a messy, high-stakes shift that favors companies with deep pockets and the ability to navigate a more transactional form of diplomacy.
Prepare for more "pay-to-play" announcements. The days of simple "bans" are over; the era of taxed exports has begun.
Next Steps:
To stay ahead of these regulatory shifts, companies should immediately review their 2026-2027 export projections and calculate the impact of a 25% "export fee" on their bottom line. Additionally, supply chain managers should verify that their "Know Your Customer" (KYC) protocols meet the new "robust" standards required for H200-level exports to ensure they don't face enforcement actions from the BIS.