To bolster the security and economic strength of the United States, the Biden Administration has proposed an Interim Final Rule on Artificial Intelligence Diffusion. The purpose of this framework is to modernize licensing challenges for large and small chip orders, support U.S. artificial intelligence (AI) leadership, and inform allied and partner nations on the benefits of AI.
Some key points of the proposal include:
- Chip sale restrictions will not apply to 18 allies and partners.
- Chip orders with total computation capabilities of around 1,700 advanced GPUs do not count against national chip caps and do not need a license.
- Entities (headquartered in close allies and partners) that meet high trust and security criteria can receive “Universal Verified End User” (UVEU) status.
Below, security leaders share their insights on this proposal.
Security leaders weigh in
Ms. Kris Bondi, CEO and Co-Founder of Mimoto:
One of the most frustrating things about decrees from any administration is that they tend to be all or nothing. Regulations are needed, however, they should be on access, monitoring, and the usage of AI.
While I agree that the use and protection of AI is critical for U.S. national security and economic strength, this form of isolationism will undermine innovation. Not every advancement is produced on U.S. soil. Instead of protecting, the bubble it will create will limit the ability to evolve and compete on a global scale.
Casey Ellis, Founder at Bugcrowd:
The rule reflects the broader consensus in Washington that AI is establishing itself as a “Great Power” technology. Maintaining American and allied dominance in this field is critical to sustaining the U.S. position as a global hegemon. The administration’s emphasis on not offshoring this critical technology underscores the strategic importance of AI in shaping future economic and geopolitical power dynamics.
Historically, America’s edge in AI and semiconductor technology has come from its ability to innovate rapidly and compete globally. Overly restrictive export controls risk alienating allied nations and preventing U.S. companies from accessing critical markets, potentially weakening America’s technological dominance. That said, the need for strategic restrictions remains clear, particularly to prevent adversaries like China or Russia from weaponizing advanced AI capabilities against the U.S. and its allies. The challenge lies in applying these restrictions with precision — narrowly targeting high-risk technologies — without undermining broader economic opportunities or innovation.
AI is inherently dual-use, meaning its capabilities can serve both civilian and military purposes. This creates immediate national security implications that justify government oversight. The current approach bears a strong resemblance to the export control regulations imposed on cryptography, where safeguarding national interests while enabling innovation became a critical balancing act.
The timing of this rule is notable, coming just days before an administration handover. It seems clear that those within the Biden Administration who worked on this framework were determined to, at the very least, ensure that their concerns and proposed solutions remain part of the policy zeitgeist moving forward.
Stephen Kowski, Field CTO at SlashNext Email Security+:
The rule attempts to strike an essential balance between protecting advanced AI capabilities and maintaining technological leadership. Given the increasing sophistication of cyber threats and potential misuse of AI systems, securing AI infrastructure and computing resources is crucial. Strong controls on AI chip exports can help prevent advanced capabilities from being used in ways that could compromise security or enable malicious activities.
Technology sharing must be balanced with robust security controls and verification systems to prevent misuse. Smart partnerships with trusted allies can amplify innovation while maintaining essential safeguards against threats. The key is implementing precise, targeted controls rather than broad restrictions.
Given its dual-use nature and potential impact on critical infrastructure, government oversight of AI technology is essential. Strong regulatory frameworks help prevent sophisticated cyber-attacks and protect against AI-enabled threats while fostering responsible innovation. The real challenge lies in creating precise, targeted controls that protect without stifling progress.
The rules represent a crucial step in establishing guardrails for AI development while maintaining technological advantage. Success will depend on implementing verification systems that can detect and prevent misuse while enabling legitimate innovation. The focus should be on creating precise controls that protect critical AI capabilities while fostering collaboration with trusted partners.
