In tandem with the Commerce Department’s Bureau of Industry and Security (BIS), the Biden administration issued a new rule on export controls of domestically produced artificial intelligence chips.
BIS issued a regulatory framework for the rule that will implement new restrictions on chips sold to foreign countries and add additional measures to strengthen the Export Control Reform Act of 2018 and Export Administration Regulations, the agency said in a press release Monday.
“To enhance U.S. national security and economic strength, it is essential that we do not offshore this critical technology and that the world’s AI runs on American rails,” the White House said in an accompanying fact sheet.
The move by the Biden administration comes days before President-elect Donald Trump returns to office. It also displays a final aggressive stance against China, which rivals the U.S. in AI research, while also trying to give the U.S. an edge in the field.
However, one of the leading manufacturers of AI chip production said the rule “threatens to derail innovation and economic growth worldwide.”
“In its last days in office, the Biden administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret, and without proper legislative review,” Nvidia said in a statement. “This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally. And 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.”
U.S. Secretary of Commerce Gina Raimondo said the 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 U.S. technological leadership.”
“Managing these very real national security risks requires taking into account the evolution of AI technology, the capabilities of our adversaries, and the desire of our allies to share in the benefits of this technology,” Raimondo said in the BIS release. “We’ve done that with this rule, and it will help safeguard the most advanced AI technology and help ensure it stays out of the hands of our foreign adversaries, while we continue to broadly share the benefits with partner countries.”
The rule separates foreign countries into three tiers with various guidelines regarding AI chip exports. The first tier is comprised of 18 countries considered to be allies and partners who will see no restrictions on chip sales. This group includes Japan, Great Britain, and South Korea.
The second tier includes Russia, China, Iran, and North Korea, which already are banned from buying AI chips. These countries will also be restricted from purchasing “closed” AI models, which are advanced models that have yet to be made public.
The third tier consists of all other countries that will now deal with limits on how many advanced graphics processing units they can purchase. Countries in this group include Singapore, Israel, and Saudi Arabia, with the rule intended to prevent the re-export of U.S.-made chips to malicious actors and countries on the restricted list.
The rule will go through a 120-day comment period before being published in the Federal Register. But with Trump coming into office next week, it’s unclear if his administration will make any changes to the rule before it is finalized. Although this action does provide even more restrictions against China, something Trump regularly calls for, the new administration will have a number of tech executives, most notably Elon Musk, who will call for fewer regulations on tech.
In October, the U.S. Treasury Department issued a final rule that limits outbound investments to China related to sensitive technologies with military applications, such as semiconductors and microelectronics; quantum information technologies; and AI.
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