New US export controls divide world into three tiers as outgoing administration seeks to cut off China’s access to AI tech

The Biden administration has unveiled wide-ranging new export controls that aim to protect the US lead in artificial intelligence (AI) and head off national security threats from China by placing licensing requirements on most countries aside from the country’s top allies.

The rules, issued a week before Biden leaves office, aim to more effectively cut off China’s access to advanced AI-related technologies by imposing a licensing regime on the entire world minus select allies.

The scheme, which received an immediate backlash from the semiconductor industry and American tech companies, allows unrestricted access to AI technologies for the G7 countries as well as others including Australia, New Zealand, South Korea, Taiwan, the Netherlands and Ireland.

Three-tier system

Another group of countries, primarily China, Iran, Russia and North Korea, are effectively barred from technologies such as advanced AI chips.

In between the other two, a third group of some 120 countries including Singapore, Israel, Saudi Arabia and the United Arab Emirates will be regulated by caps, with licence requirements for exports over those limits.

“The rule both provides greater clarity to our international partners and to industry and counters the serious circumvention and related national security risks posed by countries of concern and malicious actors who may seek to use the advanced American technologies against us,” said US national security adviser Jake Sullivan.

The Financial Times cited unnamed people as saying Nvidia’s H20 series of AI accelerator chips, designed for the Chinese market in compliance with previous export controls, would not be affected by the new regime.

Commerce secretary Gina Raimondo said the new rules would not “stifle innovation or US technological leadership”.

‘Rushed out’

But they were unpopular with US tech firms, with John Neuffer, head of the Semiconductor Industry Association, saying the rules had been “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,” he said.

In China, previous export controls have already spurred the increasing use of AI chips from the likes of Huawei Technologies.

Nvidia portrayed the regulation as an attempt to micromanage the global chip supply chain and predicted it would do nothing to enhance US security.

‘Control technology worldwide’

“The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware,” the company said.

“The new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the US ahead.”

The move was praised by groups focused on the US’ defence posture, including policy group Americans for Responsible Innovation and the Rand Corporation.

The rules do not take effect for 120 days, allowing president-elect Donald Trump to weigh in.

Ted Cruz, a Republican who is the incoming chair of the Senate commerce committee, last week said the rules would “crush American semiconductor leadership” and indicated he could trigger a congressional review.