New US rule aims to block China’s access to AI chips and models by restricting the world

The Biden administration today announced a bold and controversial new export control scheme designed to curb advanced chips. artificial intelligence models themselves from falling into the hands of competitors China.

The administration’s new “AI Diffusion Rule” divides the world into countries that are allowed relatively unfettered access to America’s most advanced AI silicon and algorithms and require special licenses to access the technology. The rule, to be enforced by the Commerce Department’s Bureau of Industry and Security, seeks to limit the movement of the most powerful artificial intelligence models for the first time.

“The United States now leads the world in AI development and AI chip design, and it’s critical that we keep it that way,” US Commerce Secretary Gina Raimondo said ahead of today’s announcement.

The list of valid countries is UK, Canada, Australia, Japan, France, Germany, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden and Taiwan.

The rule states that companies in other countries that are not subject to arms control will be able to acquire up to 1,700 of the latest AI chips without special permission. They will be able to apply for a special license to acquire more chips, build very large-scale data centers using US technology, or gain access to the most powerful closed-model “weights” developed by US firms. Companies will be required to have adequate physical and cyber security in place to obtain a license.

Supply chain activities, including chip design, manufacturing and storage, will be exempted from the rule. Nor will the rule limit open source AI models Like Meta’s Llama, says the administration.

Countries subject to arms embargoes such as China, Iran and North Korea are already banned from acquiring advanced chips. The new rule will for the first time limit their access to advanced models.

“Power semiconductors (AI) and model weights, as we all know, are dual-use technologies,” Raimondo said before the announcement. “They are used in many commercial applications, but can also be used by our adversaries to conduct nuclear simulations, develop bio-weapons and develop their armies.”

The rule is sure to be controversial, as it could reduce international sales of AI at a critical time for the industry. It’s only a week before Trump’s inauguration. The decision sets a 120-day consultation period, meaning the Donald Trump administration is expected to listen to feedback, possibly modify the rule and then implement it.

Nvidiathe the world’s leading manufacturer of AI chipscalled the rule “unprecedented and misguided.” blog post. “Though disguised as an anti-China measure, these rules will do nothing to strengthen US security. “Rather than reducing any threat, the new Biden rules will only weaken America’s global competitiveness and undermine the innovation that keeps the United States ahead.”

Already the United States restricts the export of advanced AI chips to Chinais a major geopolitical competitor, but companies there have been able to build cutting-edge algorithms using computer clusters located in other countries. Under the new rule, China will not be able to build so-called cross-border AI models in other countries affected by the rule.