The Biden administration on Monday issued sweeping rules governing how AI chips and models can be shared with foreign countries, in an effort to establish a global framework that will determine how artificial intelligence will spread around the world in the coming years .
With the power of AI rapidly growing, the Biden administration said the rules were needed to keep a transformational technology under the control of the United States and its allies, and out of the hands of adversaries who could use it to advance their expand militaries, cyber-attack, and otherwise threaten the United States.
Technology companies have protested the new rules, saying they threaten their sales and the future prospects of the U.S. tech industry.
The rules place several restrictions on the number of AI chips companies can send to different countries, effectively dividing the world into three categories. The United States and 18 of its closest partners – including Britain, Canada, Germany, Japan, South Korea and Taiwan – are exempt from all restrictions and can freely purchase AI chips.
Countries already subject to US arms embargoes, such as China and Russia, will continue to face a previously existing ban on the purchase of AI chips.
All other countries – most of the world – will be subject to caps limiting the number of AI chips that can be imported, although countries and companies can increase that number by entering into special agreements with the US government. The rules could unsettle some foreign governments: Even countries that are close trading partners or military allies of the United States, such as Mexico, Switzerland, Poland or Israel, will face restrictions on their ability to import larger amounts of U.S. AI to buy products.
The rules are intended to prevent China from acquiring the technology it needs to produce artificial intelligence from other countries, after the United States banned such sales to China in recent years.
But the regulations also have broader goals: to make allied countries the preferred location for companies to build the world's largest data centers, in an effort to keep the most advanced AI models within the borders of the United States and its partners.
Governments around the world, especially in the Middle East, have poured money into attracting and building massive data centers, in a bid to become the next center for AI development.
Jake Sullivan, President Biden's national security adviser, told reporters on Sunday that the rule would ensure that the infrastructure for training the most advanced artificial intelligence would be in the United States or under the jurisdiction of close allies, and “that that capacity is not moved abroad. like chips and batteries and other industries that we've had to invest hundreds of billions of dollars in bringing back to shore.”
Mr. Sullivan said the rule would “provide greater clarity to our international partners and to industry,” while countering national security threats from malicious actors who could use “American technologies against us.”
It will be up to the Trump administration to decide whether to enforce the new rules or how they are enforced. In a call with reporters on Sunday, Biden administration officials said the rules had bipartisan support and that they had been in discussions with the new administration about them.
Although companies in China have started developing their own AI chips, the global market for such semiconductors is dominated by American companies, especially Nvidia. That dominance has given the U.S. government the ability to regulate the flow of AI technology worldwide by restricting exports from U.S. companies.
Companies have protested these restrictions, claiming the restrictions could hinder harmless or even useful forms of computing, anger U.S. allies and ultimately push global buyers to buy non-U.S. products such as those from China.
In a statement, Ned Finkle, Nvidia's vice president for government affairs, called the rule “unprecedented and misleading” and said it “threatens to derail innovation and economic growth worldwide.”
“Rather than alleviate any threat, the new Biden rules would only weaken America's global competitiveness and undermine the innovation that has kept the U.S. ahead,” he said. Nvidia shares fell nearly 3 percent in premarket trading on Monday.
Brad Smith, Microsoft's president, said in a statement that the company was confident it could “fully comply with the high security standards of this rule and meet the technology needs of countries and customers around the world who rely on us.”
In a letter to congressional leaders on Sunday, seen by The New York Times, Jason Oxman, the chairman of the Information Technology Industry Council, a group that represents technology companies, asked Congress to intervene and use its authority use to reverse the action if the Trump administration did not.
John Neuffer, the president of the Semiconductor Industry Association, said his group was “deeply disappointed that a policy change of this magnitude and impact is being pushed out days before a presidential transition and without any meaningful input from the industry.”
“The stakes are high and the timing is fraught,” Mr. Neuffer added.
The rules, which run to more than 200 pages, also set up a system in which companies that operate data centers, such as Microsoft and Google, can apply for special government accreditations.
In exchange for following certain safety standards, these companies can then trade AI chips more freely around the world. The companies will still have to agree to keep 75 percent of their total AI computing power within the United States or related countries, and not to locate more than 7 percent of their computing power in any single other country.
The rules also provide the first checks on weights for AI models, the parameters unique to each model that determine how artificial intelligence makes predictions. Companies setting up data centers abroad will need to implement security standards to protect this intellectual property and prevent adversaries from gaining access to it.
Governments facing restrictions can increase the number of AI chips they can freely import by signing agreements with the U.S. government agreeing to join U.S. AI protection goals
Under guidance from the US government, Microsoft struck a deal last year to work with an Emirati company, G42, in exchange for G42 eliminating Huawei equipment from its systems and taking other steps.
The Biden administration could issue more rules related to chips and AI in the coming days, including an executive order to encourage domestic power generation for data centers, and new rules that aim to keep the most advanced chips out of China, people who are familiar with said deliberations.
The latest rule follows an incident last year in which U.S. officials discovered that Huawei, the sanctioned Chinese telecom company, had obtained components for its AI chips manufactured by a leading Taiwanese chip company in violation of U.S. export controls.
The announcements are part of a series of new regulations that the Biden administration wants to issue as quickly as possible in advance of the presidential turnover, as it seeks to close loopholes and continue its legacy of slowing technological development of China to strengthen. The administration has issued new restrictions on the export of chip-making equipment to China and other countries, proposed new restrictions on Chinese drones, put new Chinese companies on a military blacklist and rushed to introduce new subsidies for the U.S. complete chip production.
But the AI regulations issued on Monday appear to be one of the most sweeping and consequential of these actions. Artificial intelligence is rapidly changing the way scientists conduct research, how companies divide tasks among their employees, and how militaries operate. While AI has many useful applications, U.S. officials have grown increasingly concerned that it could enable the development of new weapons, help countries monitor dissidents and otherwise upset the global balance of power.
Jimmy Goodrich, a senior adviser for technology analysis at the RAND Corporation, said the rules would create a framework for protecting U.S. security interests while still allowing companies to compete abroad. “They are also forward-looking, seeking to preserve US and allied-led supply chains before moving them to the highest subsidy bidder,” he said.
