The US Department of Commerce has scrapped the Biden administration's Artificial Intelligence Diffusion Rule just days before it was due to come into force.

Introduced in January, the rule would have restricted the export of US-made AI chips to many countries for the first time, while reinforcing existing controls.

Rather than enforcing broad restrictions, the Department now intends to pursue direct negotiations with individual countries.

The original rule divided the world into three tiers, with countries like Japan and South Korea spared restrictions, middle-tier countries such as Mexico and Portugal facing new limits, and nations like China and Russia subject to tighter controls.

According to Bloomberg, a replacement rule is expected at a later date.

Instead of issuing immediate new regulations, officials released industry guidance warning companies against using Huawei's Ascend AI chips and highlighted the risks of allowing US chips to train AI in China.

Secretary Jeffrey Kessler criticised the Biden-era policy, promising a 'bold, inclusive' AI strategy that works with allies while limiting access for adversaries.

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