The United States is contemplating additional restrictions on the export of AI chips to China

restrictions on the export of AI chips to China

The possibility of imposing new restrictions on the export of artificial intelligence (AI) chips to China is under consideration by the Biden administration. Concerns over the potential influence of this technology in the hands of U.S. competitors have prompted these discussions, according to individuals familiar with the matter.

The Department of Commerce may take action as early as next month to halt shipments of AI chips, including those manufactured by Nvidia and other chip makers, to customers in China and other countries of concern. The new regulations would require obtaining a license before exporting the chips, thereby expanding and formalizing the export control measures announced in October. At present, the Department of Commerce has not provided an immediate response for comment.

These potential restrictions would further limit China’s ability to develop its AI capabilities, following previous measures last year that blocked access to the most advanced AI chips from Nvidia and Advanced Micro Devices. In response to those restrictions, Nvidia introduced the A800 chip specifically designed for the Chinese market, which fell below the performance thresholds established by the Department of Commerce. The contemplated restrictions would now prohibit the sale of even the A800 chips without a license. Nvidia declined to comment on the matter, and AMD has yet to respond to inquiries.

In addition to chip exports, the Biden administration is also contemplating limitations on leasing cloud services to Chinese AI companies. These firms have utilized such arrangements as a means to bypass the export bans on advanced chips. However, the exact timing of the new rules remains uncertain, as chip manufacturers continue to urge the administration to reconsider or ease the proposed restrictions. To avoid aggravating Beijing, it is expected that the administration will wait until after Treasury Secretary Janet Yellen’s visit to China in early July, according to a source familiar with the situation.

The discussions on export restrictions come as the use of generative AI tools, like OpenAI’s ChatGPT, has gained prominence. These tools gained attention only after the initial restrictions were implemented last year.

U.S. officials and policymakers increasingly view AI as a matter of national security. The incorporation of AI into weapons systems could potentially provide U.S. rivals with an advantage on the battlefield, and AI tools could be exploited to create chemical weapons or develop malicious computer code.

However, the challenge for the administration lies in safeguarding critical technologies while minimizing the impact on the operations of U.S. and allied companies. National security adviser Jake Sullivan has acknowledged this challenge, stating, “We are protecting our foundational technologies with a small yard and high fence.”

Although the Department of Commerce introduced strict export control measures on advanced semiconductors and chip-making machinery in October, formal regulations to codify these rules have not yet been issued. Since last fall, the administration has been soliciting feedback from affected businesses and engaging in negotiations with allied nations to finalize the regulations. The United States has successfully persuaded the Netherlands and Japan, both major chip-making equipment manufacturers, to align with its policies and has been working with them to establish a unified list of controlled items.

Furthermore, it is anticipated that chip manufacturers from South Korea and Taiwan will be allowed to continue operating and expanding their existing plants in China, focusing on the production of less advanced or legacy chips.

The Biden administration is also considering an executive order that would restrict U.S. investments in China and other geopolitical rivals.