AI Diffusion: A Proposed Path for Industry & Government

Mike & Brent propose an AI Diffusion Rule path forward to help both companies and the U.S. government. They start with an update on last-minute reporting before the episode was published (00:00) then cover the attention the AI Diffusion Rule is getting before its May 15, 2025 compliance date (03:56), the Rule’s similarity’s to the First World War’s “rationing system” for export controls (08:08), a report by Barath Harithas of the Center for Strategic & International Studies (CSIS) about the AI Diffusion Rule (09:15), how the AI Diffusion Rule incorporates by reference for companies in Tier 2 countries several new U.S. inbound and outbound restrictions that turn on the “high probability” standard (10:53), a CSIS report by Gregory C. Allen on DeepSeek and AI export controls in which Allen raises concerns about a high-regulation, low enforcement (or high loopholes) environment—which Mike & Brent refer to as Allen’s “One-Way Policy Fallacy” (13:21), and what Tier 2 countries (e.g., India, Israel, Singapore, Saudi Arabia, and the UAE)—and their U.S. design or manufacturing companies can do to best position customers in such countries to have national companies become National Validated End Users to obtain more chips (19:07). They conclude with the latest installment, back by ever-increasing popular demand, of Brent Carlson’s “Managing-Up” segment (23:51).

CSIS, Barath Harithas, The AI Diffusion Framework: Securing U.S. AI Leadership While Preempting Strategic Drift (Feb. 18, 2025): https://www.csis.org/analysis/ai-diffusion-framework-securing-us-ai-leadership-while-preempting-strategic-drift

CSIS, Gregory C. Allen, DeepSeek, Huawei, Export Controls, and the Future of the U.S.-China AI Race (Mar. 7, 2025): https://www.csis.org/analysis/deepseek-huawei-export-controls-and-future-us-china-ai-race

Gregory C. Allen’s “AI Policy” Podcast: https://podcasts.apple.com/us/podcast/the-ai-policy-podcast/id1726253148

Bloomberg Law, Michael Huneke, Outbound Investment Rule Embraces New National Security Paradigm (Nov. 7, 2024): https://news.bloomberglaw.com/us-law-week/outbound-investment-rule-embraces-new-national-security-paradigm-1

More about Brent: https://www.linkedin.com/in/brent-carlson-41ba692/

More about Mike: https://www.linkedin.com/in/mhuneke/

Their “Fresh Looks” series: https://www.hugheshubbard.com/fresh-looks