The Bureau of Industry and Security (BIS) has announced the rescission of the AI Diffusion Framework, a regulation introduced during the Biden administration. This move is part of an effort to replace it with a “stronger but simpler” framework in the future. The new set of rules will focus on regulating AI models and advanced computing technologies, with particular attention on China.
In addition to rescinding the framework, BIS released three guidance and policy statements that increase compliance expectations for companies using advanced chips from Chinese firms or subsidiaries. The guidance also emphasizes heightened diligence for U.S.-controlled advanced integrated circuits (ICs), especially those involving Infrastructure as a Service (IaaS) providers in countries under U.S. arms embargoes like China.
A significant aspect of the previous framework was its multi-tiered licensing policy aimed at controlling exports to certain countries deemed as threats by the U.S., including Russia, Iran, Venezuela, and China. With its rescission, there are currently no explicit controls on general-purpose AI models until new regulations are issued.
The Trump administration has indicated plans to potentially replace this tiered system with bilateral agreements with other countries. Despite these changes, national security concerns remain central to any forthcoming regulations.
The newly issued advisories underscore an aggressive approach towards export controls related to China. One advisory increases compliance expectations regarding dealings with China-linked ICs meeting specific control parameters under Export Control Classification Number 3A090. It suggests a presumption that such dealings may violate U.S. export controls.
Furthermore, BIS’s Policy Statement warns about prohibited transactions involving weapons of mass destruction or military-intelligence end users and advanced ICs classified under certain categories. Exporters are advised to be vigilant about end-use and end-user diligence when supplying controlled ICs.
Another advisory provides exporters with red flags and due diligence actions specific to exporting advanced computing ICs, focusing particularly on IaaS providers’ use of controlled ICs.
These developments signal continued concern by the U.S. government over potential diversion of advanced ICs to Chinese entities despite political shifts in Washington D.C., indicating ongoing regulatory vigilance against such risks.
