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The Biden administration announced a bold and controversial new export control scheme today, designed to prevent the advanced chips and artificial intelligence models themselves from ending up in the hands of adversaries such as China.
The administration’s new “AI Diffusion rule” divides the world into nations that are allowed relatively unfettered access to America’s most advanced AI silicon and algorithms, and those that will require special licenses to access the technology. The rule, which will be enforced by the Commerce Department’s Bureau of Industry and Security, also seeks to restrict the movement of the most powerful AI models for the first time.
“The US leads the world in AI now, both AI development and AI chip design, and it’s critical that we keep it that way,” the US Commerce Secretary Gina Raimondo said ahead of today’s announcement.
The list of trusted nations are the UK, Canada, Australia, Japan, France, Germany, Belgium, Denmark, Finland, Ireland, Italy, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, and Taiwan.
Companies in other nations not subject to arms controls will be able to obtain up to 1,700 of the latest AI chips without special permission, the rule states. They will be able to apply for a special license to acquire more chips, to build very large scale data centers using US technology, or to gain access to the most powerful closed model “weights” made by US firms. Companies will be required to have adequate physical and cybersecurity to obtain a license.
Supply chain activities, including the design, manufacturing, and storage of chips, will be exempt from the rule. The rule also will not restrict open source AI models such as Meta’s Llama, the administration says.
Arms-embargoed nations such as China, Iran, and North Korea are already forbidden from obtaining advanced chips. The new rule will for the first time restrict their access to advanced models.
“The semiconductors that power [AI] and the model weights are, as we all know, a dual use technology,” Raimondo added ahead of the announcement. “They’re used in many commercial applications but also can be used by our adversaries to run nuclear simulations, develop bio weapons, and advance their militaries.”
The rule is sure to stoke controversy, however, because it may throttle international sales of AI at a critical moment for the industry. It comes just a week before Donald Trump’s inauguration. The ruling sets a 120-day consultation period, meaning Trump‘s administration will be expected to listen to input, perhaps modify the rule, and then enforce it.
Nvidia, the world’s leading manufacturer of AI chips, called the rule “unprecedented and misguided” in a blog post. “While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance US security. Rather than mitigate any threat, the new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the US ahead.”
The US already limits exports of advanced AI chips to China, a key geopolitical rival, but companies there have been able to build cutting algorithms using computer clusters located in other nations. Under the new rule, China will not be able to build so-called frontier AI models in other nations impacted by the rule.
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