January 13, 2025
Good afternoon, Pros. As promised, we're back with more on this morning's AI export controls announcement.
1 big thing: What's next for global AI export controls
Sweeping new export controls for advanced AI chips and models are sparking fury from industry players who see an opportunity to secure changes through the incoming Trump administration, Maria reports.
Why it matters: Republicans have to make peace with competing goals — to foster innovation through deregulation and to put guardrails up in the name of national security.
- How these rules are handled will be an early test.
State of play: Companies will have an opportunity with the Trump administration to try to reverse the Export Control Framework for AI Diffusion.
- There is a 120-day window to give the incoming administration feedback on the rules, which Commerce Secretary Gina Raimondo says she fully expects could result in changes to the policy.
The rules could run up against Elon Musk's government efficiency project.
- A senior administration official said Commerce's Bureau of Industry and Security has agents around the world and law enforcement support to set up the licensing regime, but could use more.
Between the lines: The rules don't apply to China. They apply to the rest of the world.
- Companies can continue exporting advanced chips and AI models freely to 20 allied nations.
- Arms-embargoed countries were already cut off from advanced chips and they will now also be cut off from advanced models.
- All other countries will be subject to license requirements.
Some in industry say the rules will do nothing to boost national security and instead will undermine U.S. competitiveness.
- The Semiconductor Industry Association said the new rules will cause unintended consequences, and noted several regulations have already been implemented in recent years to restrict advanced chips.
- ITIF, a tech think tank, laid out alternative policies, including expanding market access for chips and AI, focusing on lawful and beneficial AI exports, and recognizing the economic implications of chip sourcing decisions.
Zoom in: Nvidia in a blog post said the rules would "control technology worldwide that is already widely available in mainstream gaming PCs and consumer hardware."
- There are exemptions in the rules that would allow for the flow of such products, but Nvidia's Tim Teter told Maria they create a "legal morass."
- The rules cover compute thresholds that Nvidia achieved a long time ago, and there are undefined terms around chips intended for the design of data centers that create risk and uncertainty.
- "That's why thank heavens for the 120 days, because we're going to have to get the Trump administration to look at this," Teter said.
The other side: The point of the licensing regime is to increase the government's visibility into shipments. That visibility would make it harder for China to gain access to U.S. chips through third countries.
- Smuggling to China, including Nvidia AI chips, is a broadly recognized problem.
2. Hill hearing watch: Confirmation time
Mark your calendars for a spate of confirmation hearings this week.
Although we're still waiting for dates for key tech and science nominees, there's a handful of hearings you may want to watch to read the incoming administration's tech tea leaves.
1. Defense secretary: Trump's pick to lead DOD, Pete Hegseth, appears before the Senate Armed Services Committee at 9:30am ET tomorrow.
- What to watch: There's sure to be fireworks at the hearing for this controversial nominee, but in terms of tech policy there could be questions on AI, quantum and DOD's spectrum plans.
2. Attorney general: Pam Bondi will testify on Wednesday at 9:30am ET in front of the Senate Judiciary Committee.
- What to watch: Big Tech antitrust, kids online safety and alleged social media censorship could all come up given the Justice Department's remit.
3. DHS secretary: Kristi Noem is up on Wednesday at 9am ET before the Senate Homeland Security and Governmental Affairs Committee.
- What to watch: DHS has been leading federal efforts on AI, and recently unveiled a generative AI playbook for the public sector. There could be questions on that approach, as well as her take on cybersecurity, biometric and identity technology and other key issues.
4. OMB director: Russell Vought, Trump's pick to run the Office of Management and Budget, will appear before HSGAC later that day, at 1pm ET.
- What to watch: During his first stint at OMB, Vought played a key role on AI policy, issuing the implementation memo to provide guidance to agencies on developing and adopting the tech. Lawmakers might ask about his approach to R&D funding and OMB guidance around the federal use and regulation of AI.
5. Energy secretary: Liberty Energy CEO Chris Wright testifies before the Senate Energy and Natural Resources Committee on Wednesday at 10am ET.
- What to watch: AI could be a focus here, given the energy demands of data centers that power the tech.
6. E&C organizes: Plus, the House Energy and Commerce Committee convenes on Wednesday at 10am ET for its organizational meeting.
- Lawmakers will adopt the rules of the committee and announce who's on each subcommittee.
What's next: Senate committees need to schedule hearings for Trump's announced tech and science picks: Howard Lutnick for Commerce, Gail Slater to head up DOJ's antitrust division, Michael Kratsios as OSTP director, and Mark Meador for the open FTC commissioner slot.
✅ Thank you for reading Axios Pro Policy, and thanks to editors Mackenzie Weinger and David Nather and copy editor Bryan McBournie.
- Do you know someone who needs this newsletter? Have them sign up here.
View archive



