The Biden administration is further restricting the sale of advanced chips used to power and develop artificial intelligence (AI) amid growing concerns about the use of American-made AI by foreign adversaries.
The AI “diffusion” rule announced Monday would place caps on chip sales to most countries around the world. Eighteen U.S. allies and partners would be exempt from the new restrictions.
“This policy will help build a trusted technology ecosystem around the world and allow us to protect against the national security risks associated with AI, while ensuring controls do not stifle innovation or US technological leadership,” Commerce Secretary Gina Raimondo said in a statement.
The new framework would require licenses for most chip sales, with varying allowances based on a country’s relationship with the U.S.
Those that are not U.S. allies would be permitted to purchase up to 50,000 advanced graphics processing units (GPUs), although this number could be doubled through government-to-government arrangements.
Individual entities would also be able to apply for a special status to purchase up to 320,000 advanced GPUs in order to facilitate the construction of data centers.
Allied countries are exempt from the licensing requirements. These include Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, the Republic of Korea, Spain, Sweden, Taiwan and the United Kingdom.
Smaller shipments of up to 1,700 advanced GPUs would also not require licenses and would not count toward country’s chip caps.
The rule was immediately slammed by the semiconductor and chips industry. Nvidia, a top producer of advanced GPUs, called the framework “unprecedented and misguided” and warned it could “derail innovation and economic growth worldwide.”
“By attempting to rig market outcomes and stifle competition — the lifeblood of innovation — the Biden Administration’s new rule threatens to squander America’s hard-won technological advantage,” Ned Finkle, Nvidia’s vice president of government affairs, said in a statement.
The Semiconductor Industry Association (SIA) also said it was “deeply disappointed” the rule was unveiled just days before a change in administration and without much input from industry.
“The new rule risks causing unintended and lasting damage to America’s economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors,” SIA President and CEO John Neuffer said in a statement. “The stakes are high, and the timing is fraught.”
