AI

Biden proposes new rules on AI exports, drawing fire from Nvidia, much of chip industry

The Biden-Harris administration issued on Monday a new interim export control rule on AI chips that has angered much of the semiconductor industry, including the powerful Semiconductor Industry Association and market leader Nvidia.

In a statement, the SIA said the new rule imposes “global restrictions and onerous licensing requirements on US export of advanced integrated circuits.”  CEO John Neuffer added the SIA is “deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful 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. The stakes are high and the timing is fraught,” Neuffer added.

The new rule requires a 120-day comment period and could be affected by the incoming Trump administration. It is described in a fact sheet from the White House as a means of enhancing US national security and economic strength: “It is essential that we do not offshore this critical technology and that world’s AI runs on American rails.”

The new rule is designed to streamline hurdles for large and small chip order and offer clarity to allied and partner nations about how they can benefit from AI. There are six key mechanisms, including no restrictions on chip sales to 18 key US allies and partners and no license requirement on chip orders with up to 1,700 advanced GPUs.

In reaction, an Nvidia spokesman said in a blog the new rules “would do nothing to enhance US security. The new rules would control technology worldwide, including tech that is already widely available in mainstream gaming PCs and consumer hardware.”

Meanwhile, Microsoft issued a statement saying it would be able comply with the new rules. “We’re confident we can comply fully with this new rule’s high security standards and meet the technology needs of countries and customers around the world that rely on us,” said Brad Smith, Microsoft’s president, in the statement.

The allies without any restrictions include Australia, Belgium, Canada, Denmarket, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan and United Kingdom. Users outside these close allies can purchase up to 50,000 graphics processing units per country, with the ability to increase that cap to 100,000 if their tech security goals and nenewable energy goals meet US requirements.

The Information Technology Industry Council had previously warned Commerce Secretary Gina Raimondo that the new rule could fragment global supply chains. “While we share the US government’s commitment to national and economic security, the rule’s potential risks to US global leadership in AI cannot be emphasized enough,”  said ITIF in a letter signed by Naomi Wilson, senior vice president for global trade policy.

Commerce officials have said in recent months that the US needs to take prompt actions to preserve an 18- month advantage with AI over China and other rivals.  They worry that China and others can stockpile chips to make more gains, hence the need to act quickly, and apparently the rationale for the urgency in the new rule issued Monday.