The Biden administration has unveiled a new system for controlling AI chip exports that splits the world into three distinct groups. While America's closest allies will maintain full access, most countries face new restrictions, sparking pushback from the tech industry.
Under rules announced Monday, the Commerce Department is creating three categories of access to US AI technology. A select group of 18 close allies, including Japan, the UK, Germany, and the Netherlands, will keep unrestricted access. About 120 countries, including Israel and Saudi Arabia, will face strict limits on how many chips they can buy. China, Russia, Iran, and North Korea won't be able to import these chips at all.
Tech giants like Microsoft, Google, and Amazon can apply for special permits to work around some country-specific limits. But there's a catch: they'll need to meet strict security requirements, keep at least half their AI computing power in the US, and limit any single country outside the closest allies to no more than 7% of their total computing capacity.
Industry pushback: Nvidia leads the charge
Leading AI chip manufacturer Nvidia has reacted to the new rules with harsh criticism. The company describes them as a "sweeping overreach" that jeopardizes America's leading position in AI development. The regulations would affect technology that is already available in ordinary gaming PCs and could give foreign competitors an advantage.
The rules are facing political resistance too. Republican Senator Ted Cruz, who's set to chair the Senate Commerce Committee, claims they were developed secretly without input from Congress or US companies and could "crush American semiconductor leadership." He's threatening to use the Congressional Review Act to challenge the decision.
The administration stands firm, though. National Security Advisor Jake Sullivan says these steps are crucial for national security, noting that the US currently leads China in AI development by six to 18 months - an advantage worth protecting.
The rules take effect in 120 days, giving the next administration time to review them. While Trump might take over the White House, experts think he'll likely maintain tough restrictions on China.
