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Biden Imposes Restrictions On Export Of US Made AI Chips

In its final days, the Biden administration has enacted new restrictions on the export of US-developed computer chips that are essential for powering artificial intelligence (AI) systems. This initiative aims to prevent rival nations, particularly China, from gaining access to this cutting-edge technology.

These restrictions, which represent the culmination of years of efforts to curb China’s military and industrial progress, are likely to heighten tensions between Washington and Beijing, especially with the inauguration of President-elect Donald Trump on the horizon. Major US tech companies, including Nvidia and Oracle, have expressed strong opposition to these measures. US Secretary of Commerce Gina Raimondo emphasized on Sunday that the new regulations are intended to protect the most advanced AI technology from falling into the hands of foreign adversaries while also facilitating the widespread sharing of its benefits with allied countries.

Biden Imposes Restrictions on Export Of US Made AI Chips

Biden Imposes Restrictions on Export Of US Made AI Chips

The global export framework, announced Monday, establishes three tiers of countries for exports of advanced AI chips and technology. Countries like Australia, Japan, South Korea, and Taiwan, considered partners and allies, will face no new restrictions. A second tier, including China and Russia, which are already blocked from purchasing advanced chips, will now face new restrictions on the sale of the most powerful “closed” AI models.

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These models are characterized by not publicly releasing their underlying architectures. The most significant changes will affect the third group, encompassing most of the world. These countries will face new limitations on the amount of computing power they can purchase, although they can apply for additional quotas if they meet specific security requirements. Analysts believe that this change is intended to prevent China from circumventing restrictions by accessing AI chips through third countries, particularly in the Middle East.

Reason For Restrictions

The restrictions are being introduced amid soaring global demand for AI chips produced by companies like Nvidia, AMD, and Intel. Although these rules enter a 120-day comment period before taking full effect, they will come into effect before the period ends. Raimondo stated, “We hope that the next administration takes full advantage of those 120 days to listen to experts, industry, industry players, partner countries.”

She also acknowledged that the incoming administration might implement changes based on feedback. Senior Biden administration officials, speaking on background, confirmed “ongoing discussions about a range of issues” with the incoming Trump administration but emphasized the urgent need to act, stating, “We believe we’re in a critical window right now, particularly vis-a-vis China. Every minute counts from our perspective.”

These measures come just a month after the outgoing administration announced restrictions on the sale of approximately two dozen types of semiconductor-making equipment and restrictions on various Chinese companies from accessing American technology. Since October 2022, there have been multiple rounds of semiconductor export restrictions targeting Beijing as Chinese leader Xi Jinping seeks to establish China as a tech superpower by pursuing self-sufficiency in the sector.

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