The Bureau of Industry and Security has completed an interagency review of its rule that will formally rescind the Biden-era AI diffusion rule (see 2505070039). The agency sent the final rule for interagency review May 7 (see 2505080026), and it was completed July 10.
The Bureau of Industry and Security’s latest export control enforcement action against a semiconductor firm shows the agency may be preparing to target companies that flout its high probability standard, a trade lawyer and industry consultant said.
All shipments of U.S.-origin advanced AI semiconductors will require an export license from the Malaysian government when moving through Malaysia, the country announced July 14, a move that further aligns Malaysia with U.S. efforts to prevent the diversion of sensitive chips to China.
Senate Banking Committee ranking member Elizabeth Warren, D-Mass., and Sen. Jim Banks, R-Ind., a member of the committee, urged Nvidia CEO Jensen Huang July 11 to avoid undermining U.S. export restrictions during his upcoming trip to China to discuss AI cooperation.
The U.S. government, together with industry, needs to set clearer guardrails around sensitive technology shipments destined to China, two panelists said during an event on export controls last week. Another panelist questioned whether the Trump administration is willing to set tougher rules, saying Beijing appears to have recently gained extra leverage and adding that the U.S. has for years failed to deter companies from flouting restrictions against China.
The Senate Appropriations Committee endorsed a proposal July 10 to urge the Bureau of Industry and Security to create a program to provide financial rewards to those who report illegal exports of advanced semiconductors and AI-enabling chips to “foreign adversaries.”
Microsoft President Brad Smith this week warned the U.S. against introducing new export controls that could prevent American companies from becoming the world’s leading exporters of AI services, suggesting the Trump administration should instead look into expanding or replicating the AI deal it announced in May with the United Arab Emirates.
A bipartisan, bicameral group of lawmakers issued a press release late July 7 calling on Congress to pass a bill that would require export-controlled advanced computing chips to contain location verification mechanisms.
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Companies should expect the Bureau of Industry and Security to continue a steady pace of penalties against export violators, particularly for cases involving semiconductors and other advanced technologies, said Gregory Dunlap, the former special agent in charge of the agency’s Los Angeles field office. And if Congress grants the agency’s request for more funding, Dunlap said, BIS could soon have the resources to more quickly carry out investigations and probe a greater number of exporters.