The next big battle over offshoring is playing out in Washington, and this time it involves artificial intelligence.
The Biden administration, in its final weeks in office, is rushing to issue new regulations to try to ensure that the United States and its closest allies are able to control how artificial intelligence develops in the coming years.
The laws have touched off a fierce battle between tech companies and the government, as well as among bureaucrats.
The regulations, which could be issued as early as Friday, will dictate where American-made chips critical to AI can be shipped. Those rules will then help determine where AI-powered data centers will be built, preferably in the United States and its allies.
The rules would allow many European countries, Japan and some of the US's closest allies to buy AI chips without restrictions, while barring a dozen enemies, such as China and Russia, from buying. More than 100 other countries will face different quotas on the amount of AI chips they can get from US companies.
The regulations will make it easier for AI chips to be sent to trusted American companies that use data centers, such as Google and Microsoft, than to their foreign competitors. The rules will establish security procedures that data centers must follow to keep AI systems safe from cyber theft.
The Biden administration's plan has sparked immediate pushback from American tech companies, which say global regulations could slow their businesses and create costly compliance requirements. Those companies are also questioning whether President Biden should be enacting legislation with such far-reaching economic consequences in his final days in office.
While some details remain unclear, the new rules could force technology companies that pour tens of billions of dollars into building data centers around the world to rethink some of those locations.
Artificial intelligence, capable of answering questions, writing code and creating images, is expected to change the way countries fight wars, develop medicine and deliver scientific breakthroughs. Because of their powerful influence, US officials want AI systems to be built in the United States or in allied countries – where they will have more say in what the systems do – instead of countries that would share that technology with China or do something else. measures against US national security.
Peter Harrell, a former White House chief economist and fellow at the Carnegie Endowment for International Peace, said the United States currently has the biggest advantage in AI and the power to decide which countries can benefit from it.
“It is important that we think about how we want those changes to happen around the world,” he said.
The rules are mainly about national security: Given how AI could transform military conflict, the regulations are designed to keep the most powerful technology in the hands of allies and prevent China from circumventing US borders by gaining access to AI chips through international data centers. .
But U.S. officials say data centers are also important sources of new economic activity in American communities. They want to encourage companies to build as many data centers as possible in the United States rather than in regions like the Middle East, which provides money to attract tech firms.
Some labor unions have come out in support of the Biden administration's plan. That's because data centers are big consumers of electricity and metal. Each creates work for construction companies, electricians and HVAC technicians, and workers involved in energy production.
“Workers are very interested in the future of AI and technology, not only in terms of its use but in terms of the infrastructure that supports it,” said Michael R. Wessel, counsel for the United Steelworkers union.
But U.S. tech companies and their supporters say the rules could stifle technological progress, strain international alliances, hurt U.S. companies and encourage countries to buy other technology from China, which is racing to make its own AI chips.
“The danger is that in the long run, countries will say, 'We can't rely on the United States, we can't import our advanced technology to the United States, because there's always a threat that the US government will take it away from us,'” said Geoffrey Gertz, an official at the Center for New American Security. .
California-based Nvidia, which controls 90 percent of the AI chip market, has lobbied for the rules in meetings with Congress and the White House, as have Microsoft, Oracle and other companies. They worry that the regulations could hurt exports.
Ned Finkle, Nvidia's vice president of global affairs, said in a statement that the policy would harm data centers around the world without improving national security and would “push the world toward alternative technologies.”
“We would encourage President Biden not to pre-empt the incoming President Trump by establishing a policy that will only harm the US economy, set America back and play into the hands of America's enemies,” said Mr. Finkle.
Tech companies have also tried to blunt the impact by appealing to President-elect Donald J. Trump to oversee the incoming administration, which could decide whether to maintain or tighten the rules, tech executives and other people familiar with the trade said.
Microsoft and Oracle declined to comment.
It is not clear whether Mr. What would Trump do about this issue, although he recently expressed his support for building data centers in the United States. His advisers include some China skeptics who may favor stricter restrictions. Others, including the president's son-in-law Jared Kushner, have business ties to countries in the Middle East that are likely to oppose any restrictions.
The new rules build on export controls put in place by the Biden administration in recent years to ban the export of advanced AI chips to China and other rival countries and to require special licenses to export AI chips to countries in the Middle East and Southeast Asia. .
Those controls allowed the United States to have some influence in the world. In order to gain access to Nvidia chips last year, G42, the leading AI company in the United Arab Emirates, promised to stop using technology made by Huawei, a Chinese telecommunications company under US sanctions.
But US concerns have grown that Chinese companies are acquiring sensitive technology by smuggling chips or remotely accessing data centers in other countries.
Also, companies have faced long waits to get licenses for even small quantities of chips, and foreign officials have urged the Biden administration to try to get them. So officials began working last year on a secret distribution plan.
Tech companies say the requirements are too onerous and could make data centers too expensive in some nations, preventing others from using AI to benefit their healthcare, transportation and tourism industries. Among the countries that will face caps and other restrictions are traditional US allies such as Israel, Mexico and Poland, a member of NATO.
“We can all agree that none of this burden or use of AI technology and the GPUs they rely on affects national security,” said Ken Glueck, Oracle's senior vice president, on the company's blog about image processing units, or AI chips. .
Nvidia and other technology companies also argued that the rules could backfire by driving consumers in the Middle East, Southeast Asia and elsewhere to Chinese companies like Huawei.
Some US officials have tried to counter that narrative. Other analyzes compiled by U.S. officials, including consulting with the private sector, said Chinese chipmakers faced major obstacles and would not be able to ship enough chips to train sophisticated AI models. The analysis was reviewed by the New York Times.
“Huawei is struggling to make chips advanced enough to train AI models inside China, much less chips that are exported,” said Matt Pottinger, a former national security adviser to Mr. Trump and the CEO of Garnaut Global, a China-focused research firm. .
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