"Global AI must run on American rails": five days after being announced by Bloomberg sources, the departing Joe Biden administration has finally dealt a final blow to Chinese industry. The US Department of Commerce published on Monday, January 13, its new regulation that will limit the sale of semiconductors intended for AI to China and other “adversary” countries.
In a document of more than 200 pages, Washington describes an entirely new global licensing system for exports of the most advanced AI technologies. It adds to the four waves of restrictions already issued since October 2022, intended to hinder China’s technological development. For years, Washington has sought to limit the ability of American chipmakers, such as Nvidia and AMD, to sell advanced processors to Beijing. Some rules have also been extended to U.S. allies. This time, the new rules aim to ensure that cutting-edge artificial intelligence is developed by the United States and its allies, excluding China.
Allied countries, banned countries, restricted countries
In effect, the world map is now divided into three parts:
- The 18 U.S. allies retain unrestricted access to chips developed by Nvidia, the American semiconductor giant, and other local or allied companies. Among them are Japan, Australia, South Korea, Taiwan, Canada, New Zealand, as well as the majority of European countries (such as the Netherlands, Germany, France, the United Kingdom, Belgium, Denmark, Finland, Ireland, Italy, Norway, Spain, Sweden but not Portugal or Switzerland);
- countries already under a US arms embargo such as China, Russia, but also Iran, Iraq, Sudan, the Democratic Republic of Congo, etc. will no longer be able to import these semiconductors at all;
- for all other countries in the world such as the United Arab Emirates, Saudi Arabia or even countries in South America and Southeast Asia, ceilings limiting the number of artificial intelligence chips that can be imported are imposed. These countries will be able to bypass these limits by entering into special agreements with the US government.
AI development under US control
With these new rules, the development of AI will remain under the control of the United States and its allies, and out of the hands of adversaries who could use it to strengthen their military, carry out cyberattacks and threaten the United States, the official statement said.
The goal is also to keep the most advanced artificial intelligence models within the borders of the United States and its allies, said Jake Sullivan, President Biden’s national security adviser, quoted in the press release from the Bureau of Industry and Security, an agency of the Department of U.S. Commerce.
“We’ve had to invest hundreds of billions of dollars to bring back to America” the infrastructure needed to train the most advanced artificial intelligence like chips, batteries and other industries, he added. These new rules provide “more clarity to our international partners and industry, and counter serious circumvention and related national security risks posed by countries of concern and malicious actors who might seek to use advanced U.S. technologies against us,” he continued.
New End-User Status Validated
Any order for chips with a collective computing power of up to 1,700 GPUs will not require a license, but others will have to comply with the new standards.
Companies that are not located in “banned” countries will, however, be able to escape this requirement provided they comply with “a set of U.S. government security requirements and human rights standards.” They will then obtain “Universal End User Validated (UFV)” status, a status that would allow them to “develop and deploy AI in secure environments around the world.”
It should be noted that this also applies to the construction of data centers around the world: American companies and those located in allied countries will have to obtain authorization from the Bureau of Industry and Security of the Department of Commerce in the event of using American technology. The new rules do not apply to developments in open-source AI models like Meta’s Llama, the Commerce Department also said in a statement.
Nvidia calls the rule “unprecedented and misguided”
For U.S. semiconductor makers, the new rules will undermine U.S. competitiveness. Ned Finkle, Nvidia’s vice president of government affairs, called the regulation “unprecedented and misguided.” In a blog post on Monday, he said it “threatens to derail innovation and economic growth around the world.” “Rather than mitigate any threat, Mr. Biden’s new rules would only weaken America’s global competitiveness, undermining the innovation that has kept the United States ahead,” he said.
Five days earlier, the world’s leading semiconductor maker had already described “a last-minute rule restricting exports to most of the world.” Enough to “constitute a major policy shift that would not reduce the risk of abuse, but would threaten American economic growth and leadership.” Companies around the world now have one year to comply with the new rules.
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