A small group within the U.S. Department of Commerce is developing a narrower replacement for the Biden administration’s AI diffusion rule, according to four people familiar with the matter. The effort follows the White House announcement after President Donald Trump began his second term in 2025 that it would revoke the rule, which restricted advanced AI chip exports to slow geopolitical rivals such as China. The replacement remains under development and could focus on preventing Chinese companies from remotely accessing advanced AI computing capacity through overseas data centers and cloud services. Alibaba could be affected, while prediction-market YES pricing for its removal from the Chinese Military Companies list by June 30, 2027, edged down from 18% to 17.5%.