Overview

• The draft rule marks the first formal step in President Trump’s plan to overhaul his predecessor’s AI export framework by rescinding the 2023 diffusion regulations
• New licensing requirements aim to prevent advanced Nvidia processors from being rerouted through Malaysia and Thailand into China via third-party networks
• Existing restrictions on exports to China and more than 40 other countries, first introduced in 2022 and strengthened under Biden, would remain intact
• A transitional provision would let U.S. and allied firms continue shipping AI chips to Malaysia and Thailand for several months without a license to avoid market disruption
• Singapore prosecutors have charged three men over schemes involving AI servers moved from Singapore to Malaysia, highlighting enforcement challenges in Southeast Asia