Biden proposes new export controls on GPUs targeting China

The Biden administration has unveiled its “AI diffusion rule,” which aims to restrict the export of GPUs that are most coveted for AI applications. Although it does not mention the nation by name, it's broadly viewed as a means to prevent China from outpacing the US in AI development.

The rule proposes three licensing tiers. The first tier is unrestricted and includes the domestic market as well as 18 strategic allies. The majority of countries fall into a second tier, which will have caps on how much compute power they can import via top GPUs from the US. The third tier includes China, Russia, Iran and North Korea, and effectively bars US companies from selling their most powerful GPUs there.

US-based companies would also be prevented from sharing many details of their AI software models with countries outside that first tier, and would need to ask permission from the federal government before building large data centers in any tier two nation.

Many parties, including the Semiconductor Industry Association (SIA), issued statements condemning the decision, believing that the restrictions will do more to push nations towards working with China. "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," SIA wrote.

NVIDIA also objected, with Ned Finkle, the company's Vice President of Government Affairs, saying the Biden Administration “seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review.”

The rule has a 120 day comment period, so whether it survives the incoming Trump administration remains an open question.

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