The Biden administration is proposing new rules to tighten control over the flow of AI chips | Business and economic news
The administration of outgoing US President Joe Biden is proposing a new framework for the export of advanced computer chips used to develop artificial intelligence, in an attempt to balance national security concerns about the technology with the economic interests of manufacturers and other countries.
But the framework proposed Monday also raised concerns from chip industry executives who said the rules would limit access to existing chips used for video games and restrict in 120 countries chips used for data centers and artificial intelligence products. Mexico, Portugal, Israel and Switzerland are among the countries that may have limited access.
Commerce Secretary Gina Raimondo told reporters reviewing the framework that it is “critical” to maintain U.S. leadership in artificial intelligence and the development of AI-related computer chips. Rapidly developing artificial intelligence technology is enabling computers to produce novels, conduct scientific research, automate driving and drive a host of other transformations that could reshape economies and warfare.
“As artificial intelligence becomes more powerful, the risks to our national security become even more intense,” Raimondo said. The framework is “designed to protect the most advanced AI technology and ensure it stays out of the hands of our foreign adversaries, but also allows for broad diffusion and benefit sharing with partner countries.”
White House National Security Adviser Jake Sullivan emphasized that the framework would ensure that the most cutting-edge aspects of artificial intelligence are developed within the US and its closest allies, rather than possibly being pushed overseas like the battery and renewable energy sectors.
A technology industry group, the Information Technology Industry Council, warned Raimondo in a letter last week that the Democratic administration’s hastily implemented new rule could fragment global supply chains and put American companies at a disadvantage. Another group, the Semiconductor Industry Association (SIA), said on Monday it was disappointed that the policy had been “shoved out the door” ahead of the presidential transition. President-elect Donald Trump is scheduled to take office on January 20.
“The new rule risks causing unintended and lasting harm to the U.S. economy and global competitiveness in semiconductors and artificial intelligence by ceding strategic markets to our competitors,” said SIA President and CEO John Neuffer.
One industry executive familiar with the framework, who insisted on anonymity to discuss it, said the proposed restrictions would restrict access to chips already used for video games despite government claims to the contrary. The executive branch said it would also limit which companies can build data centers overseas.
‘Controlling Technology Worldwide’
Because the framework includes a 120-day comment period, Trump’s new Republican administration could ultimately set the rules for foreign sales of advanced computer chips. This sets up a scenario where Trump will have to balance US economic interests with the need to maintain the security of the country and its allies.
Government officials said they felt the need to act quickly in hopes of preserving what is seen as a six- to 18-month US artificial intelligence lead over rivals like China, an advantage that could easily be lost if rivals in opportunities to stockpile tokens and make further gains.
Ned Finkle, vice president of external affairs at chipmaker Nvidia, said in a statement that the previous Trump administration helped lay the groundwork for the development of artificial intelligence and that the proposed framework would hurt innovation without achieving stated national security goals.
“Although cloaked in the guise of ‘anti-China’ measures, these rules will do nothing to increase US security,” he said. “The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware.”
Under the framework, roughly 20 key allies and partners would face no restrictions on chip access, but other countries would face restrictions on the chips they can import, according to a fact sheet provided by the White House.
Unrestricted allies include Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and Great Britain.
Customers outside of these close allies could purchase up to 50,000 graphics processing units per country. There would also be government-to-government deals that could raise the cap to 100,000 if their renewable energy and technological security targets are aligned with the US.
Institutions in certain countries could also apply for legal status that would allow them to purchase up to 320,000 advanced graphics processing units over two years. However, there would be limits to how much companies and other institutions could market artificial intelligence computing capacity abroad.
Also, orders of computer chips equivalent to 1,700 advanced graphics processing units would not need an import license or count towards the national chip limit. An exception for 1,700 graphics processing units would likely help fill orders for universities and medical facilities as opposed to data centers.
The new rules are not expected to hamper the AI-driven data center expansion plans of leading cloud computing providers such as Amazon, Google and Microsoft because of exemptions for trusted companies seeking large clusters of advanced AI chips.
China’s Ministry of Commerce said in response to the proposed rules that China would take the necessary measures to protect its “legitimate rights and interests.”
