US may impose new export rules on AI chips
What's the story
The US government is considering new regulations for export of artificial intelligence (AI) chips. The proposed changes could require foreign countries to either invest in US data centers or provide security guarantees. This comes as part of a plan to control export of 200,000 chips or more. If implemented, these rules would be the first attempt to regulate the flow of AI chips to US allies and partners since the Trump administration rescinded former President Joe Biden's AI diffusion rules.
Market implications
Major impact on tech giants
The proposed regulations could have a major impact on the sales of tech giants NVIDIA and Advanced Micro Devices (AMD). The new rules are a departure from Biden's strategy, which was based on the assumption that close US allies should be exempt from most export restrictions on these high-demand chips. Blacklisted countries like Russia would still not be able to get US AI chips under Biden-era rules.
Licensing requirements
Small installations could also require licenses
The proposed regulations could even require a license for small chip installations of less than 1,000 chips. To qualify for an exemption, the chip exporter (like NVIDIA or AMD) would have to monitor them. The recipient would also have to agree not to use software that links these chips into a "cluster," which is an industry term for large groups of chips.
Export conditions
Government-to-government assurances needed for larger exports
Foreign companies wanting up to 100,000 chips would have to provide government-to-government assurances. The Trump administration had already asked Saudi Arabia for such assurances to buy advanced chips. Installations of up to 200,000 chips could also require visits from US export control officials. Saif Khan, a former national security official in the Biden administration, said these rules could help address chip diversion to China and ensure secure buildout of powerful AI supercomputers.
Regulatory stance
Commerce Department clarifies position on proposed regulations
The US Commerce Department has confirmed that it is discussing new rules for AI chip exports. However, the department stressed that these wouldn't be similar to what it called a "burdensome, overreaching, and disastrous" framework proposed by Biden's administration. Instead, the Commerce Department said it would follow deals made with Saudi Arabia and UAE where both countries agreed to invest in the US.