The Biden administration issued new restrictions on chip exports US-developed computer systems that power artificial intelligence (AI) systems in a final effort to prevent that rivals like China access this advanced technology, just a week before leaving office.
The new restrictions, the culmination of years of attempts to prevent China from gaining ground in its military and industrial leadership efforts, are likely to further inflame tensions between Washington and Beijing ahead of the inauguration of President-elect Donald Trump next week.
They have also triggered intense criticism from US technology giants such as Nvidia and Oracle.
Speaking to reporters on Sunday, US Commerce Secretary Gina Raimondo said the new rules were “designed to protect the most advanced AI technology and ensure it stays out of the hands of our foreign adversaries, but also allowing broad dissemination and sharing of benefits with partner countries”.
The global export framework, announced on Monday (13), creates three tiers of countries for exports of chips and advanced AI technology. There are no new restrictions for partners and allies such as Australia, Japan, South Korea and Taiwan.
A second tier of countries, including China and Russia, already barred from purchasing advanced chips, will be subject to new restrictions on the sale of the most powerful “closed” AI models, which refer to models whose underlying architectures are not disclosed to the public.
The biggest changes will be faced by the third group, comprising most of the world, who will soon have new limits on the amount of computing power that can be purchased, although they will be able to request additional quotas subject to certain security requirements.
Analysts said this move is intended to prevent China from accessing AI chips through third countries, particularly in the Middle East.
The restrictions are being announced against a global backdrop of growing demand for AI chips made by companies like Nvidia, AMD and Intel.
With days until Biden leaves office, the rules now enter a 120-day comment period but will take effect before that period ends.
“We hope the next administration makes the most of these 120 days to listen to experts, industry, industry participants, partner countries,” said Raimondo. “I fully hope that the next administration can make changes as a result of this contribution.”
Senior Biden administration officials, speaking on background, were asked Sunday about the extent to which they consulted with the incoming Trump administration. Officials only acknowledged that there were “ongoing discussions about a range of issues.”
“We believe we are in a critical window now, particularly with regard to China,” said one official. “Every minute counts from our perspective.”
The latest measures were announced just a month after the outgoing government announce restrictions the sale of two dozen types of semiconductor manufacturing equipment and restrictions on the access of several Chinese companies to American technology.
Since October 2022, the administration has announced several rounds of semiconductor export restrictions targeting Beijing. Chinese leader Xi Jinping has made self-sufficiency an important pillar of his economic strategy to make China a technological superpower.
Tech giants Nvidia, the world’s largest supplier of processors that power AI, and Oracle, as well as an influential semiconductor industry group, have criticized the new restrictions, accusing the Biden administration of bureaucratic excess and saying they would hurt U.S. competitiveness.
In a blog post published on Monday, Ned Finkle, vice president of government affairs at Nvidia, wrote that the adoption of AI around the world drives growth and opportunities for domestic and international industries.
“This global progress is now in danger. The Biden Administration now seeks to restrict access to mainstream computing applications with its unprecedented and misguided ‘AI Diffusion’ rule, which threatens to derail innovation and economic growth around the world,” he wrote.
“Although disguised as an ‘anti-China’ measure, these rules would do nothing to enhance US security,” he added.
Oracle Executive Vice President Ken Glueck the rule “does more to achieve extreme regulatory overreach than to protect the interests of the U.S. and our partners and allies.”
“This practically enshrines the law of intended consequences and will cost the US critical technological leadership,” he said.
Last week, the Washington-based Semiconductor Industry Association said it was “deeply concerned about the unprecedented scope and complexity of this potential regulation, developed without industry input, and could significantly harm U.S. leadership and competitiveness in technology. semiconductors and advanced AI systems.”
