The Biden-era AI Diffusion rule has gone 547 days past its compliance date without being enforced, and its text is still in the Code of Federal Regulations, by our reading of the eCFR on 13 November. The Bureau of Industry and Security said on 13 May 2025 that it would not enforce the rule and “plans to publish a regulation formalizing the rescission”; the Federal Register shows no such rule as of today, by our search.
The status came up on a ChinaTalk and SemiAnalysis podcast recorded after the Nvidia CEO resignation, where one speaker said the framework “was passed and then just not enforced. It’s still on the books”. The record agrees on both counts. The rule still lists 18 countries plus the United States for its widest licence exception and a cap of 790,000,000 TPP per country for most others.
Business Pill · GPUs Explained
A short explainer on GPUs, the chips the AI Diffusion rule caps by processing performance. It teaches the general idea and does not discuss the rule.
The key insight: As we read it, the gap that matters is between the text and the practice: the AI Diffusion rule’s country caps and licence exceptions are still in the Code of Federal Regulations 547 days after its compliance date, while BIS has said in three documents since May 2025 that it is not enforcing them, and the rule meant to formally rescind them is listed but unpublished.
The Framework for Artificial Intelligence Diffusion was published on 15 January 2025 as an interim final rule, 90 FR 4544. It took effect on 13 January 2025, but exporters were “not required to comply with the changes made in this rule until May 15, 2025”.
Two days before that date, BIS announced a “rescission of the Biden Administration’s AI Diffusion Rule”. The release says Under Secretary Jeffery Kessler “has instructed BIS enforcement officials not to enforce the Biden Administration’s AI Diffusion Rule”, and that BIS “will issue a replacement rule in the future”.
A press release does not change the regulations. The eCFR text of Title 15, up to date as of 10 November 2026, still carries supplement no. 5 to part 740, License Exception AIA in 740.27, License Exception LPP in 740.29 and the country allocations in 742.6, each citing the January 2025 rule.
The 2026 Unified Agenda, published on 14 August, lists an interim final rule, RIN 0694-AJ90, that “will formally rescind” the January 2025 rule and “establish a new, streamlined framework”. It describes the 2025 rule as one “which BIS has already stopped enforcing”. That was 91 days ago, by our arithmetic.
Days between dates on the public record of the AI Diffusion rule, counted to 13 November 2026. Dates from the Federal Register, the BIS release of 13 May 2025 and BIS guidance of 31 May 2026; the day counts are our arithmetic.
What the 2025 Rule Wrote Down
The rule sorts the world into three groups, by our reading. Supplement no. 5 lists 19 destinations in its paragraph (a), 18 of them besides the United States, from Australia to the United Kingdom, including Japan, the Republic of Korea and Taiwan. The text lets entities there use License Exception AIA and gives licence applications for them a presumption of approval.
Country Group D:5 and Macau sit at the other end, with a presumption of denial for advanced chips. Everyone else falls in the middle: approval is presumed “up to a per-country allocation of 790,000,000 TPP for the period from 2025 to 2027”, then denial. Paragraph (b), for destinations that give government assurances and can get up to 100% more, lists none.
Smaller buyers in those countries had License Exception LPP, which allows “up to 26,900,000 cumulative total processing performance (TPP) of advanced computing integrated circuits per-calendar year” to a single buyer. The country allocation is about 29 of those annual limits, by our arithmetic. The rule also added a worldwide licence requirement for AI model weights under ECCN 4E091.
Compute limits from the AI Diffusion rule still in the eCFR text of 15 CFR 740.27, 740.29 and 742.6, up to date as of 10 November 2026, in million TPP. BIS said on 13 May 2025 it would not enforce the rule. The 1,580 figure is the 790 allocation raised by up to 100%, our arithmetic.
What the Podcast Said, Checked
On the episode, a speaker said BIS “never repealed it in 2025” and that the change was a “footnote somewhere” in May 2025. The first part matches the Federal Register: no rescinding rule has been published in 2025 or 2026, by our search of its database. The second undersells the record: the May 2025 step was a press release with an enforcement instruction, plus guidance.
The non-enforcement has since been written into BIS documents. Its guidance of 31 May 2026 says that “In May 2025, BIS announced that it would not be enforcing the AI Diffusion Rule’s new compliance requirements”. BIS’s UAE rule of 14 July 2026 says the worldwide licence requirement is still in 742.6 but BIS “is only enforcing” it for Country Groups D:1, D:4 or D:5 and for entities headquartered in D:5 or Macau.
A second line of the episode called it “guidance to the BIS basically”. The Federal Register classes it as a rule. Dylan Patel of SemiAnalysis said on the same episode that “Biden style diffusion controls should totally be done”; that is his view, and the Biden-era rule itself is still in the regulations.
What Is Still Enforced
The rule moved an older requirement. The 31 May 2026 guidance says a licence “continues to apply” for advanced chips to entities headquartered in D:5 or Macau wherever they are located, because that requirement “predates the AI Diffusion Rule”, from November 2023. Our earlier explainer, chip export rules explained, sets out the layers from 2022 on.
The country caps, the AIA certifications and the LPP limits are among the rule’s new compliance requirements that BIS said in May 2025 it would not enforce, by our reading of its documents. The UAE rule of July 2026 moved the UAE from D:4 to A:5 but kept licences for advanced chips there except for approved recipients. For the bills now in Congress, see our map of the rules in force.
The Structural Read
As we read the record, the podcast’s status line holds: the Federal Register has no rescinding rule, by our search, and the eCFR still cites 90 FR 4544 for supplement no. 5, 740.27, 740.29 and the country allocations in 742.6.
As we read BIS’s 2026 documents, non-enforcement is now a written policy, not a footnote: the 31 May 2026 guidance and the July 2026 UAE rule both restate it, and both keep enforcing the older licence requirement for entities headquartered in D:5 or Macau.
BIS press release, 13 May 2025
“BIS plans to publish a regulation formalizing the rescission and will issue a replacement rule in the future”
Three Implications
FOR EXPORTERS BIS says it is enforcing the worldwide licence requirement in 742.6 only for Country Groups D:1, D:4 or D:5 and for entities headquartered in D:5 or Macau, per its UAE rule of July 2026.
FOR THE 18 LISTED COUNTRIES Supplement no. 5 still lists them, plus the United States, for License Exception AIA; paragraph (b) for higher allocations lists none.
FOR THE TIMELINE BIS said it would formalise the rescission 549 days ago, and the Unified Agenda listed the rule, RIN 0694-AJ90, 91 days ago, by our arithmetic.
The framework argues that the AI supply chain is “creating geopolitical leverage that operates independently of who has the best models”.
As we read it, the AI Diffusion rule is that leverage written down as country caps, and its status shows the leverage can sit in the regulations without being used. The framework predates this piece and does not discuss the rule.
What Is Not Established
The speakers on the podcast are not labelled in the captions we read, so we attribute the status line to one speaker, not to a named person. BIS has not said when RIN 0694-AJ90 will be published, and the Unified Agenda entry gives no date in the part we read. We did not contact BIS or the podcast for this piece.
Whether an unenforced rule still binds exporters in any other way, for example in contracts or audits, is a legal question we do not answer here. The cloud and chip bills in Congress, covered in our cloud bill explainer and our MATCH Act explainer, are separate from this rule.
This Week In The AI Supercycle
The Great Convergence of Capital, Power, and Geopolitics
This week’s issue: for two years the AI build-out was priced as a supply story, and last week as a credit story. This week it was priced as a permission story, and the answer arrived as a cost, not a ban.
The AI Diffusion rule is still in the Code of Federal Regulations, 547 days after its compliance date, and BIS has said since 13 May 2025 that it is not enforcing it. A rescinding rule is on BIS’s 2026 agenda but has not been published, so the podcast’s “still on the books” matches the record.
A note on sourcing. The rule, its dates and its caps are from the Federal Register (90 FR 4544, 15 January 2025). The non-enforcement is from the BIS release of 13 May 2025, BIS guidance of 31 May 2026 and the UAE rule (91 FR 43034, 14 July 2026). The planned rescission rule is from the 2026 Unified Agenda (91 FR 52792). The current text is from the eCFR, up to date as of 10 November 2026, read on 13 November.
The absence of a rescinding rule is our search of the Federal Register database on 13 November 2026. Podcast quotes are from the episode’s auto captions, which do not label speakers. Day counts and ratios are our arithmetic. BIS was not contacted for this piece.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
