Biden Administration Imposes New AI Chip Export Controls

By Song Sang-ho

On January 13, 2023, the Biden administration announced new restrictions on the export of artificial intelligence (AI) chips. This decision aims to prevent advanced technologies from reaching countries deemed a national security risk, such as China and Russia.

As the administration approaches the end of its term, an interim final rule has been implemented. Notably, there are no export restrictions for 20 major U.S. allies and partners, which include South Korea, Japan, Australia, Canada, Germany, France, and New Zealand. However, countries outside this trusted group will face limits on the amount of computational power they can acquire.

According to Secretary of Commerce Gina Raimondo, this new policy is designed to cultivate a secure technology landscape globally. It aims to safeguard national security from potential risks associated with AI while ensuring that these controls do not hinder innovation or U.S. leadership in technology.

Entities based in the allied countries that meet strict safety and trust standards can gain “universal verified end user (UVEU)” status. This classification allows them to allocate up to 7 percent of their total AI computational capacity—potentially amounting to hundreds of thousands of chips—across different nations.

For entities outside the close U.S. allies, they can still acquire substantial computational power, limited to about 50,000 advanced graphics processing units (GPUs). If they enter into an agreement aligning with U.S. export and other standards, this limit could double to 100,000 GPUs.

Furthermore, organizations that meet security requirements in non-concerning countries can apply for the “national verified end user” status, enabling them to purchase up to 320,000 GPUs over the next two years.

Notably, chip orders that collectively amount to about 1,700 advanced GPUs do not require a license and will not be counted against national chip caps. This means that the majority of chip orders, such as those from universities and medical institutions, will be exempt from the restrictions.

The new regulations are structured to prevent advanced semiconductors from being used by nations at risk while still allowing access for general applications in sectors like telecommunications and banking.

National Security Adviser Jake Sullivan stated that the rule provides essential clarity for international partners and the industry. It is designed to mitigate the significant risks associated with circumvention by adversarial countries and malicious actors who could exploit advanced American technology for harmful purposes.

Interestingly, U.S. AI chip manufacturers have expressed concerns regarding this new rule. They fear that it may hinder their ability to market and sell their products internationally, especially as demand for AI applications continues to grow.

This file photo, released by Reuters, depicts the technological rivalry between the United States and China.

Biden, AI, Export