Chip exports: Trump says easing of restrictions for Gulf countries might be announced soon

Controversial AI diffusion policies limit semiconductor exports to various countries

Semiconductor chips on a circuit board. Reuters

US President Donald Trump said his administration might soon change a controversial chip export policy that some say stifled AI aspirations of countries in the Middle East and elsewhere.

"We might be doing that, and it’ll be announced soon," Mr Trump said in the Oval Office on Wednesday, after speculation that he may be planning to ease chip export restrictions to some of countries on his trip to the Gulf next week.

Last week, a source told The National that the Trump administration was working to ease export restrictions on the UAE, one of the countries that would have been affected by the export policies set to go into effect on May 15.

The policy, also referred to as the AI diffusion rule, was drafted during the final months of the Biden administration as it sought to protect the US lead on AI development by preventing highly powerful central processing units and graphic processing units from being obtained by rival countries, such as China.

Jensen Huang, chief executive of Nvidia. FP

If enacted, the law would split countries and territories into tiers that would determine how many powerful chips and GPUs they could buy.

Falling into the first tier and unaffected by the rules are Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the UK.

Other countries, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE and Saudi Arabia, would fall into a second-tier category, making it more difficult – although not impossible – to obtain the chips needed for AI research and development.

The third tier of countries – China, Iran, North Korea, Russia, Syria and Venezuela – will have the most difficulty obtaining GPUs and CPUs under the new rules, if they are applied.

US technology giants like Nvidia and Microsoft have been vocal in recent months, pushing for the export policies to be largely shelved.

In January, Ned Finkle, vice president of government affairs at Nvidia, said the Biden administration sought to “undermine America’s leadership with a 200-plus-page regulatory morass, drafted in secret and without proper legislative review”.

Other companies, however, such as Anthropic, have defended the rules on grounds of national security.

Those disagreements reached a crescendo last week, resulting in a war of words between Nvidia and Anthropic.