The United States announced on Monday (January 13) a new set of rules for the export of artificial intelligence (AI) chips, aiming to keep these advanced technologies within the hands of the U.S. and its allies. At the same time, the U.S. imposed quotas on exports to most countries, making it harder for China to bypass American sanctions by purchasing U.S. chip technology from these nations.
The new regulations will limit the quantity of AI chips that can be exported to most countries while allowing unlimited usage of U.S. AI technology for America’s closest allies. The rules continue to prohibit the export of these technologies to countries such as China, Russia, Iran, and North Korea.
The updated regulations now require authorization for exports, re-exports, and domestic transfers of chips, along with exceptions for friendly nations.
The export controls on AI chips will be categorized into three levels. Level one includes 18 key U.S. allies and partners such as Japan, the United Kingdom, South Korea, the Netherlands, and Taiwan. There are no restrictions on U.S. exports to these countries.
Level two controls involve most countries globally including Israel, Singapore, Saudi Arabia, and the United Arab Emirates among approximately 120 nations. Sales of advanced chips to these countries will be subject to quotas. This move aims to prevent China from circumventing the export controls implemented by the U.S. over the past two years.
The Biden administration acknowledges that Beijing has been circumventing U.S. sanctions aimed at hindering its development of advanced AI. The U.S. has found that China has been indirectly procuring U.S. chips and other technologies through other countries.
Level three controls include countries like Russia, communist China, Iran, North Korea, and Venezuela. The U.S. prohibits the export of AI chip technology to these nations.
The new regulations also bring advanced “weights for closed AI models” under control, based on restrictions announced in 2023 regarding the export of certain AI chips to China.
These new rules aim to control the flow of chips and the global development of AI by closing loopholes and adding new barriers to maintain the U.S.’s leadership position in the field of AI.
Commerce Secretary Gina Raimondo stated on Monday, “The United States currently leads in the field of AI, both in development and chip design, and it is crucial that we maintain this position.”
The new restrictions will also cover high-end graphics processing units (GPUs), which provide power for the data centers needed for training AI models. Most of these GPUs are produced by Nvidia, while AMD (or Advanced Micro Devices) also sells AI chips. The stocks of Nvidia and AMD dropped by 2% to 3% in pre-market trading on Monday.
White House National Security Advisor Jake Sullivan said that these rules make it “difficult for our strategic competitors to exploit smuggling and remote access to evade our export controls” while “encouraging our friends and partners around the world to use advanced AI provided by trustworthy suppliers.”
“America must prepare for the rapid growth of AI capabilities in the coming years, which could have a transformative impact on our economy and national security,” Sullivan added.
Raimondo stated that the new regulations will take effect within 120 days, giving the incoming Trump administration time to make possible adjustments.
So far, the Biden administration has imposed comprehensive restrictions on China’s access to advanced chips and chip production equipment, not only updating control measures but also strengthening restrictions and tracking countries that may transfer these technologies to China.