RIYADH (Reuters) -The United States does not need to block the global spread of its AI chips and technology to manage national security risks, a White House official said on Tuesday, signalling a more open stance on exports to trusted allies such as Saudi Arabia.

David Sacks, the White House's AI and crypto czar, made his comments in Riyadh days after Washington announced plans to rescind and modify a Biden-era regulation that would limit global access to artificial-intelligence chips.

"The Trump administration has just announced that we will be rescinding what's known as the Biden diffusion rule... it literally restricted the diffusion or proliferation of American technology all over the world," Sacks told the Saudi-U.S. Investment Forum at the start of a tour of Gulf states by President Donald Trump.

"(Diffusion) is not a risk with a friend like Saudi Arabia at all but I think in general there was a great deal of misunderstanding about the diversion of GPUs," Sacks said, referring to graphics processing units, specialised processors originally created to accelerate graphics rendering.

His comments mark a shift from recent curbs on data center tech transfers and reflect growing U.S. interest in deepening tech ties with Middle Eastern partners that are pouring billions into AI infrastructure and aiming to become a hub for the emerging technology outside the United States.

"The original reason for this diffusion rule is that we have a policy of not wanting our advanced semiconductors to go to what are known as countries of concern," said Sacks, adding that it was never intended to capture friends, allies and strategic partners.

The Framework for Artificial Intelligence Diffusion was issued in January, a week before the end of the administration of former President Joe Biden. It capped a four-year effort by the Biden administration to hobble China's access to advanced chips that could enhance its military capabilities and to maintain U.S. leadership in AI.

Trump appointed Sacks in December, in an effort to reshape U.S. policies on digital assets and AI.

The new administration's tech backers have generally called for minimal regulation around AI and cryptocurrencies such as bitcoin, saying Washington would throttle growing innovative sectors with excessive rules.

The industry has said that by limiting access to the chips, countries will buy the technology from China.