The U.S. Commerce Department has revised export regulations for advanced semiconductors, effective May 2025, to foster innovation and strengthen international partnerships. The changes replace previous restrictions with a new approach, focusing on bilateral agreements to manage semiconductor exports on a country-by-country basis. This shift aims to streamline access to critical technology for nations like the UAE and Saudi Arabia, enhancing collaboration in AI development.

The Bureau of Industry and Security (BIS) is tasked with developing a replacement rule, moving away from broad restrictions to tailored export agreements. The timing of the announcement aligned with a U.S. presidential visit to the Middle East on May 15, 2025, after which semiconductor companies Nvidia and AMD secured significant contracts to supply high-performance chips to Saudi Arabia. These deals underscore the revised policy’s focus on expanding technology access for trusted partners.

Jeffery Kessler, U.S. Under Secretary of Commerce for Industry and Security, stated: “The Trump Administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world, while keeping the technology out of the hands of our adversaries.” The new approach is designed to balance innovation with security, ensuring U.S. leadership in AI technology.

Additionally, the BIS plans to strengthen oversight of specific AI hardware used globally. The agency will issue guidance clarifying restrictions on certain overseas AI chips, particularly those from Huawei, to maintain compliance with U.S. export controls. Huawei’s Ascend processors, marketed as alternatives to Nvidia’s GPUs, have faced challenges with inter-chip connectivity and software performance, according to industry feedback.

The BIS also intends to impose stricter penalties on companies using AI chips to develop or operate certain AI models. The impact on firms collaborating with advanced AI models, such as DeepSeek, remains under review. Previously, chipmakers like Nvidia designed lower-powered chips, such as the H20, for specific markets, but these efforts were limited by stringent export licensing requirements.

The Commerce Department emphasized: “Today’s actions ensure that the U.S. will remain at the forefront of AI innovation and maintain global AI dominance.” The revised regulations aim to support U.S. technological advancement while fostering international cooperation, positioning the country as a leader in the global AI landscape.