Biden administration proposes new rules to tighten control of AI chip flow | Business and Economic Affairs

The outgoing administration of the President of the United States Joe Biden proposed a new framework for the export of advanced computer chips used to develop artificial intelligence, an attempt to balance national security concerns about technology and the economic interests of manufacturers and other countries.

But Monday's proposed draft also raised concerns from chip industry executives who say the rules would limit access to existing chips used in video games and limit to 120 countries chips used in data centers and AI products. Mexico, Portugal, Israel and Switzerland are among the countries that may have limited access.

Commerce Secretary Gina Raimondo said in a press conference ahead of the draft that it is “critical” to maintain America's leadership in AI and the development of AI-related computers. Rapidly advancing AI technology is allowing computers to produce novel inventions, make breakthroughs in scientific research, drive autonomously and inspire a range of other changes that could reshape economies and wars.

“As AI becomes more powerful, the risks to national security grow exponentially,” Raimondo said. The framework is “designed to protect the most advanced AI technologies and ensure that they do not remain in the hands of our foreign adversaries but also allow for wider dissemination and sharing of benefits with our partner countries.”

The National Security Adviser of the White House, Jake Sullivan, emphasized that the framework will ensure that the best aspects of AI will be developed within the US and its closest allies instead of possibly being offshored such as the battery and renewable energy sectors.

The information technology industry group, the Information Technology Industry Council, warned Raimondo in a letter last week that new legislation passed quickly by the Democratic administration could disrupt global supply chains and put American companies at risk. Another group, the Semiconductor Industry Association (SIA), said on Monday it was disappointed that the policy was being “rushed to the door” before the presidential transition. President-elect Donald Trump will take office on January 20.

“The new legislation risks unintended and lasting damage to the American economy and global competition in semiconductors and AI by giving strategic markets to competitors,” said SIA President and CEO John Neuffer.

One industry official familiar with the draft and who insisted on anonymity for discussion said the proposed restrictions would limit access to chips already used for video games despite claims by the government to the contrary. This official said that he will limit which companies can build data centers abroad.

'Control technology around the world'

Because the draft includes a 120-day comment period, the incoming Republican administration of Trump can finally decide the rules for foreign sales of advanced computers. This creates a situation where Trump will have to balance US economic interests with the need to keep the country and its allies safe.

Government officials have said they feel the need to act quickly in hopes of maintaining what is considered a six- to 18-month US lead in AI over rivals such as China, a head start that could easily disappear if rivals can raise money. chips and get other gains.

Ned Finkle, vice president of external affairs at chipmaker Nvidia, said in a statement that the Trump administration has helped build the foundation for AI development and that the proposed framework will harm innovation without achieving stated national security goals.

“Although cloaked in an 'anti-China' approach, these laws will do nothing to improve US security,” he said. “These new rules will regulate technology around the world, including technology that is already widely available in mainstream gaming PCs and consumer hardware.”

Under the framework, about 20 key allies and partners will not face restrictions on access to the chips, but other countries will face restrictions on the chips they can import, according to a fact sheet provided by the White House.

Partners include but are not limited to Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan and the United Kingdom.

Users outside of these partners can purchase up to 50,000 image processing units per country. There could also be government-to-government agreements that could raise the limit to 100,000 if their renewable energy and technology security goals match the US.

Institutions in certain countries can also apply for legal status that would allow them to purchase up to 320,000 advanced image processing units within two years. Still, there will be limits to how much AI computing power can be outsourced by companies and other institutions.

Also, computer chip orders equal to 1,700 image processing units will not require an import license or count against the national chip cap. The release of 1,700 image processing units may help meet orders for universities and medical centers as opposed to data centers.

The new rules are not expected to hinder the AI-driven data center expansion plans of leading cloud computing providers such as Amazon, Google and Microsoft due to exemptions for trusted companies seeking large batches of advanced AI chips.

China's Ministry of Commerce said that in response to the proposed laws, China will take appropriate measures to protect its “legitimate rights and interests”.