UNITED STATES: The Biden administration has unveiled a proposal to restrict the export of advanced computer chips critical for artificial intelligence (AI) development.
The framework, announced on Monday (13 January), seeks to preserve America’s six- to 18-month lead over nations like China in the rapidly advancing field of AI.
The proposed rules, which aim to safeguard national security, have drawn criticism from chip industry leaders who warn of unintended consequences, including innovation slowdowns and global supply chain disruptions.
Proposed export controls aim to maintain America’s six- to 18-month lead over countries like China in the AI sector
The new measures would limit the export of cutting-edge chips to 120 countries.
Nations such as Mexico, Portugal, Israel, and Switzerland may face restrictions, while close U.S. allies like Australia, the United Kingdom, and Japan are exempt.
Export limits would include a cap of 50,000 graphics processing units (GPUs) per country, with options to raise it to 100,000 through government agreements aligned with U.S. renewable energy and technological security goals.
Additionally, institutions in restricted countries could apply for special permissions to acquire up to 320,000 advanced GPUs over two years.
To balance scientific and educational needs, chip orders equivalent to 1,700 GPUs for universities and medical institutions would not require licenses or count toward national limits.
Commerce Secretary Gina Raimondo defended the proposal, stating, “As AI becomes more powerful, the risks to our national security become even more intense.”
She added that the framework is designed to prevent advanced AI technologies from reaching adversaries while promoting collaboration with partner countries.
AI technology, which powers innovations from automated driving to breakthroughs in scientific research, has the potential to reshape economies and warfare.
Raimondo emphasised the urgency of maintaining America’s edge, highlighting fears that rivals like China could rapidly catch up if allowed unfettered access to advanced chips.
Nvidia slams proposed AI chip export controls as “misguided”
Nvidia, a leading U.S. chipmaker, criticised the proposal as “misguided,” warning that it could stifle global innovation and economic growth.
Ned Finkle, Nvidia’s vice president of external affairs, argued, “While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance U.S. security.”
The Information Technology Industry Council, a tech advocacy group, also raised concerns.
In a letter to Raimondo, the group urged more extensive consultations with the industry, cautioning that a hastily implemented rule could fragment global supply chains and weaken U.S. leadership in AI.
Critics highlights potential loopholes
Critics have questioned the framework’s effectiveness, citing potential loopholes.
Despite U.S. export bans on Nvidia’s high-end AI chips, some Chinese firms have reportedly acquired these GPUs through alternative routes.
Last month, Su Di, a Beijing-based entrepreneur, claimed in a viral Douyin video that he had access to Nvidia’s H100 and H200 GPUs, thanks to a friend who “circumvented U.S. restrictions.”
Su revealed that this shipping operation had been ongoing for two years, despite the friend being blacklisted by U.S. authorities twice.
The H100 and H200 GPUs, designed for high-performance computing and AI, are priced at $40,000 and higher, respectively.
Their exceptional processing power and AI optimisations make them critical for generative AI and large-scale tasks.
The proposal sets the stage for the incoming administration of President-elect Donald Trump to decide on the final rules, as the framework includes a 120-day comment period.
This leaves Trump’s team to balance economic interests with national security concerns, potentially shaping the future of U.S.-China tech competition.
While the Biden administration hopes to curtail China’s AI advancements, industry leaders warn of broader implications.
Critics argue that restricting global access to advanced technology could undermine U.S. leadership in AI, alienate trade partners, and fail to close existing loopholes exploited by Chinese firms.
