Biden administration proposes sweeping new restrictions on exporting AI chips

With a week left in office, President Joe Biden introduced a new set of guidelines and restrictions for exporting U.S.-made AI chips.

On Monday the administration announced its Interim Final Rule on AI diffusion. This ruling is meant to “provide clarity to allied and partner nations about how they can benefit from AI” and streamline licensing hurdles for chip orders, according to a White House press release. But these rules also introduce new chip sale restrictions on the majority of countries in the world.

These new guidelines split countries up into three groups, according to reporting from CNN.

The first group includes the U.S.’s strongest allies, like Japan and South Korea, which aren’t affected by the new restrictions. The second group includes countries like China and Russia. These countries already can’t buy advanced AI chips and will now face further restrictions under the new guidelines regarding most “closed” AI models. The third group, which encompasses most of the world, will now have caps on how many chips they can buy. The cap is set to 50,000 graphics processing units per country, but there are numerous ways a country can access a higher quota.

This third group of countries that are neither the U.S.’s strongest allies, nor enemies, which includes places like Mexico, Portugal, and Israel, among many others, are arguably the most affected by the changes, CNN reported. The restrictions on this group of countries are meant to prevent adversaries like China and Russia from buying chips through them, but will also hurt the adoption of AI in these countries in the process.

Nvidia released a statement Monday that called the proposed rules “unprecedented and misguided” and added that they would “derail” innovation and economic growth worldwide.

These proposals are meant to build off of guidance that the Biden administration released in October 2022 and October 2023. Today’s proposal also includes a 120-day comment period, but the rules will take effect before that period is over, according to CNN reporting.

While this news is causing quite the stir in the AI community, with a new administration taking office next week, the conversation around chip export restrictions could look completely different by the end of the month.