The Biden administration on Monday issued comprehensive rules governing how artificial intelligence chips and models can be shared with foreign countries, in an attempt to set a global framework that will guide how artificial intelligence spreads around the world for years to come.
With the power of artificial intelligence growing rapidly, the Biden administration has said the rules are necessary to keep the transformative technology under the control of the United States and its allies, and out of the hands of adversaries who could use it to bolster their military, launch cyberattacks and attack others. ways to threaten the United States.
Technology companies have protested the new rules, saying they threaten their sales and the future prospects of the US technology industry.
The rules set different limits on the number of AI chips companies can ship to different countries, essentially dividing the world into three categories. The United States and 18 of its closest partners — including Britain, Canada, Germany, Japan, South Korea and Taiwan — are exempt from any restrictions and can freely buy AI chips.
Countries already subject to the US arms embargo, such as China and Russia, will continue to face a pre-existing ban on buying AI chips.
All other nations — most of the world — will be subject to restrictions limiting the number of AI chips that can be imported, although countries and companies can increase that number by entering into special agreements with the US government. The rules could hurt some foreign governments: Even countries that are close trading partners or military allies of the United States, such as Mexico, Switzerland, Poland or Israel, will face restrictions on their ability to buy large quantities of American AI products.
The rules are intended to prevent China from obtaining the technology it needs to produce artificial intelligence from other countries, after the United States banned such sales to China in recent years.
But the regulations have broader goals: to make allied countries the place of choice for companies to build the world’s largest data centers, in an effort to keep the most advanced models of artificial intelligence within the borders of the United States and its partners.
Governments around the world, particularly in the Middle East, have been pumping money into attracting and building massive data centers in an attempt to become the next center for the development of artificial intelligence.
Jake Sullivan, President Biden’s national security adviser, told reporters on Sunday that the rule would ensure that the infrastructure for training the most advanced artificial intelligence is in the United States or close allies, and “that capacity will not be offshored like chips and batteries and other industries that we had to invest hundreds of billions of dollars in to bring back to the mainland.”
Mr. Sullivan said the rule would provide “greater clarity to our international partners and industry” while countering threats to national security from malicious actors who could use “American technologies against us.”
It will be up to the Trump administration to decide whether to keep the new rules or how to implement them. Speaking to reporters Sunday, Biden administration officials said the rules had bipartisan support and had been consulted with the new administration.
Although companies in China have started developing their own AI chips, the global market for such semiconductors is dominated by American companies, especially Nvidia. This dominance has given the US government the ability to regulate the flow of AI technology around the world, by restricting the exports of US companies.
The companies protested the restrictions, saying the restrictions could threaten harmless or even useful types of computing, anger US allies and ultimately force global buyers to buy non-US products, such as those made by China.
In a statement, Ned Finkle, Nvidia’s vice president of government affairs, called the rule “unprecedented and wrong” and said it “threatens to crowd out innovation and economic growth around the world.”
“Instead of mitigating any threat, Biden’s new rules would only weaken America’s global competitiveness, undermining the innovation that has kept the US ahead,” he said. Nvidia shares fell more than 2 percent Monday morning.
Brad Smith, Microsoft’s president, said in a statement that the company is confident it can “fully meet the high security standards of this rule and meet the technology needs of countries and customers around the world who rely on us.”
In a letter to congressional leadership Sunday, seen by The New York Times, Jason Oxman, president of the Information Technology Industry Council, a group that represents technology companies, asked Congress to step in and use its authority to overturn the lawsuit if the Trump administration doesn’t.
John Neuffer, president of the Semiconductor Industry Association, said his group is “deeply disappointed that a policy change of this magnitude and impact is being rushed out the door days before the presidential transition and without any significant industry input.”
“The stakes are high and the timing is difficult,” added Mr. Neuffer.
The rules, which are more than 200 pages long, also set up a system in which companies that operate data centers, such as Microsoft and Google, can apply for special state accreditations.
In exchange for complying with certain security standards, these companies can then trade AI chips more freely around the world. Companies will still have to agree to keep 75 percent of their total AI computing power within the United States or allied countries, and not to locate more than 7 percent of their computing power in any other country.
The rules also set the first control weights for AI models, parameters unique to each model that determine how the AI makes its predictions. Companies setting up data centers overseas will need to adopt security standards to protect this intellectual property and prevent adversaries from accessing it.
Governments facing restrictions can increase the number of AI chips they can freely import by signing an agreement with the US government agreeing to comply with US AI protection goals
Under the guidance of the US government, Microsoft entered into a partnership agreement with an Emirati company, G42, last year in exchange for G42 eliminating Huawei equipment from its systems and taking other steps.
The Biden administration could issue more rules related to chips and artificial intelligence in the coming days, including an executive order to encourage domestic power generation for data centers and new rules aimed at keeping cutting-edge chips out of China, people familiar with the deliberations said.
The latter rule comes in response to an incident last year in which US officials found that Huawei, a sanctioned Chinese telecommunications company, was sourcing components for its AI chips made by a leading Taiwanese chip company, in violation of US export controls.
The announcements are among a series of new regulations the Biden administration is rushing to release before the president is removed as he tries to close loopholes and cement his legacy of opposing China’s technological development. The administration has issued new restrictions on exports of chip-making equipment to China and other countries, proposed new restrictions on Chinese drones, added new Chinese companies to the military’s blacklist and rushed to finalize new subsidies for US chipmaking.
But the AI regulations announced Monday appear to be among the most far-reaching and consequential of these actions. Artificial intelligence is rapidly changing the way scientists conduct research, how companies distribute tasks among their employees, and how the military operates. While artificial intelligence has many useful uses, US officials have become increasingly concerned that it could enable the development of new weapons, help states monitor dissidents and otherwise alter the global balance of power.
Jimmy Goodrich, senior adviser for technology analysis at the RAND Corporation, said the rules would create a framework to protect American security interests while still allowing companies to compete abroad. “They are also looking to the future, trying to preserve US and allied supply chains before they are offshored to whoever offers the highest subsidy,” he said.
