The Trump Administration is hamstrung by deep staters and Biden holdovers working against America-First policies.
For example, even though President Trump is all about putting “America First” and seeks to boost US companies and allies, Biden-era officials deep inside the Washington bureaucracy have stopped the new Administration cold on just such policies in the AI arena.
During the last week of President Biden’s term, the Bureau of Industry and Security (a 500-person agency within the U.S. Department of Commerce) launched a series of unreasonably restrictive new regulations over AI chips, semiconductors and biotechnology. This knowingly defied the new direction of the incoming Administration.
These restrictions surrounded the Biden Administration’s “AI Diffusion Rule.” In the form of an executive order, this rule required that domestic AI chip makers reserve 50 percent of all production for domestic consumption. It put severe limitations on the exportation of the remaining chips to so-called “Tier 1” allies and a few others. Biden’s AI Diffusion Rule went into effect a week before President Trump was sworn into office in 2025. One of Trump’s first acts of office was to rescind this Biden rule as “ill conceived.”
The rule was not only ill-conceived but also ineffective. There is nothing in the AI Diffusion Rule that would prevent a Tier One allied country – say Japan, for example – from buying US AI chips and selling them on to China. And indeed, this is exactly what happens.
Though Biden political appointees and sympathetic civil service government workers defended the last-minute adoption as ‘wrapping up loose ends,’ the Diffusion Rule was a regulatory ambush that continues to undermine our AI policy regarding chip sales to date.
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Senior career government officials who spent years at BIS shaped the policies that have strangled our AI chip exports and throttled our ability to compete in worldwide markets.
Though Secretary of Commerce Howard Lutnick was able to eventually push out some career bureaucrats, the deep state culture and its onerous regulatory regime live on. Even the Secretary himself has recently adhered to Biden-era AI trade policies during a recent Congressional hearing, echoing the arguments of his former Biden-era staffers.
Despite the Commerce Department formally rescinding the Biden-era AI Diffusion Rule in May 2025, no replacement has been published a year later because of internal resistance to the new Administration. This has created a regulatory vacuum, complicating the ability of American companies to innovate and sell their products worth billions of dollars.
Additionally, the 2022 and 2023 chip restrictions launched under Team Biden remain in effect, burdensome as they are. This means American companies cannot sell advanced chips to important markets without clearing significant hurdles in a complex licensing process.
So, months after the Biden team’s AI Diffusion Rule was rescinded, the vacuum it created without a replacement caused the worst licensing backlog at BIS in over 30 years. Thousands of applications have been stalled, and a fortune in U.S. technology shipments have been stuck. And unfortunately, that vacuum is quickly being filled by Chinese competitors like Huawei.
Also, unfortunately, the problem runs much broader than just that at Commerce.
Over at the State Department, unelected bureaucrats demanded even more Biden-era restrictions on advanced chips. They successfully pushed for overly tough conditions for obtaining export licenses, such as: mandatory third-party testing of domestic chips, detailed end-use reporting schemes, and unreasonable requirements that at least half of H200 chip shipments serve U.S. customers first.
And as bad as that sounds, it gets even worse.
Some of the same people who helped create such Biden-era unreasonable policies left government and eventually consolidated at Anthropic PBC, a San Francisco-based tech company run by Dario Amodei, a key Democrat donor. Former Biden officials who served in places like the White House, National Security Council and AI Safety Institute now hold high places at Anthropic PBC.
Per Axios, as Anthropic PBC has hired former Biden officials, it has also increased its lobbying expenditures by 344 percent from the first quarter of 2025 to a whopping $1.6 million in the first quarter of 2026. Doubling down against Trump is a gross understatement.
“Anthropic is a safe haven for Biden officials who are diametrically opposed to President Trump’s America First AI policy and are trying to weasel their way into the national security space.”This statement was made by a former Trump administration official speaking anonymously, as reported by multiple outlets, including the Denver Gazette and SUCCESS QUARTERLY.
Thus, despite the president declaring America open for business, including in the ever-expanding and powerful AI arena, it would seem that his own cabinet agencies are causing billions of dollars in losses to our companies while working against the agenda of the new administration in preference to that of the old one.
Clearly, we need a replacement for the Diffusion Rule while overcoming the untoward influence of the past administration remaining in the current administration. It’s past time for President Trump to clean house of deep state actors continuing to thwart him. America First should mean America leads. Those standing in the way should be cast out.
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