The rule was an effort to ensure that the world’s largest data centers would be built by the United States and its allies, rather than in the Middle East or elsewhere. Biden officials were skeptical of the U.A.E.’s and Saudi Arabia’s autocratic tendencies and ties to China. They also argued that the rule would limit China’s access to A.I. chips and data centers in other countries, which could strengthen Beijing’s strategic and military capabilities.
The rule, which was scheduled to take effect May 15, permitted unlimited A.I. chip sales to 18 allies like Britain, Germany and Japan, and blocked sales to China, Iran and other adversaries. All other countries, including Saudi Arabia, the United Arab Emirates, Qatar, India, Israel and Poland, faced caps on the number of chips they could purchase, and many were not happy about it.
Jim Secreto, a former deputy chief of staff for the Commerce Department, said that the rule aimed to preserve national security and shape the future of a critical technology. Without regulation, the availability of cheap energy and capital abroad might mean that more data centers would be built outside the United States than inside.
“Who controls A.I. is the geopolitical question of our time,” he said.
Companies like Nvidia and Oracle also protested the rule, saying it would backfire on U.S. technology leadership. Trump officials seemed to agree with that argument. On Wednesday, the administration submitted a filing saying that it would publish a new rule that would rescind the previous framework, though it gave no timeline for the change.
“The Biden A.I. rule is overly complex, bureaucratic, and would stymie American innovation,” Ben Kass, a spokesman for the Commerce Department, which oversees technology controls, said in a statement. “We’re replacing it with a simpler, clearer framework that prioritizes U.S. dominance and unleashes the full potential of American A.I. innovation.”