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Washington/Hong Kong (CNN) — The Biden administration has issued new restrictions on the export of US-developed computer chips that power artificial intelligence (AI) systems, in a final effort to prevent rivals like China from accessing the advanced technology, just a week before leaving office.
The fresh curbs, the culmination of years of attempts to block China from gaining ground in its military and industrial leadership efforts, are expected to further inflame tensions between Washington and Beijing ahead of the inauguration of President-elect Donald Trump next week. They’ve also triggered intense criticism from US tech giants like Nvidia and Oracle.
Speaking to reporters on Sunday, US Secretary of Commerce Gina Raimondo said the new rules were “designed to safeguard the most advanced AI technology and ensure that it stays out of the hands of our foreign adversaries, but also enabling the broad diffusion and sharing of the benefits with partner countries.”
The global export framework, announced Monday, creates three tiers of countries for exports of advanced AI chips and technology. There are no new restrictions for partners and allies like Australia, Japan, South Korea and Taiwan.
A second tier of countries including China and Russia, which are already blocked from buying advanced chips, will be newly subject to restrictions on the sale of the most powerful “closed” AI models, which refer to models whose underlying architectures are not released to the public.
The biggest changes will be faced by the third group, which comprises most of the world, which will soon have new caps on the amount of computing power that can be bought, although they will be able to apply for additional quotas subject to certain security requirements. Analysts have said this change 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 soaring demand for AI chips made by the likes of Nvidia, AMD and Intel. With days to go before Biden leaves office, the rules now enter a 120-day comment period but will take effect before that period is over.
“We hope that the next administration takes full advantage of those 120 days to listen to experts, industry, industry players, partner countries,” Raimondo said. “I fully expect the next administration may make changes as a result of that input.”
Senior Biden administration officials, speaking on background, were asked Sunday about the extent to which they consulted with the incoming Trump administration. Officials would only acknowledge there were “ongoing discussions about a range of issues.”
“We believe we’re in a critical window right now, particularly vis-a-vis China,” one official said. “Every minute counts from our perspective.”
The latest measures were announced just a month after the outgoing administration announced curbs on the sale of two dozen types of semiconductor-making equipment and restrictions on numerous Chinese companies from accessing 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 a major pillar of his economic strategy to make China a tech superpower.
‘In jeopardy’
Tech giants Nvidia, the world’s largest provider of processors that power AI, and Oracle as well as an influential semiconductor industry group blasted the newest restrictions, accusing the Biden administration of bureaucratic overreach and saying they would harm US competitiveness.
In a blog post published on Monday, Ned Finkle, Nvidia’s vice president of government affairs, wrote the adoption of AI around the world fuels growth and opportunity for industries at home and abroad.
“That global progress is now in jeopardy. 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 worldwide,” he wrote.
“While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance US security,” he added.
Oracle Executive Vice President Ken Glueck wrote last week the rule “does more to achieve extreme regulatory overreach than protect US interests and those of our partners and allies.”
“It practically enshrines the law of intended consequences and will cost the US critical technology leadership,” he said.
Last week, the Washington-based Semiconductor Industry Association said it was “deeply concerned by the unprecedented scope and complexity of this potential regulation, which was developed without industry input and could significantly undercut US leadership and competitiveness in semiconductor technology and advanced AI systems.”
The-CNN-Wire
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