Biden admin implements ‘final rule’ on AI export controls, tech world claps back
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On Monday, Biden announced his “final rule” at the White House, imposing export controls artificial intelligence (AI) chips until President-elect Donald Trump’s inauguration next week, which was quickly condemned by industry leaders who argue that the Democratic administration is effectively undermining America’s leadership in emerging technology.
With the stated goal of strengthening “U.S. security and economic strength,” the Biden-Harris administration issued an “Interim Final Rule for the Proliferation of Artificial Intelligence.”
A White House press release said the initiative “eases licensing barriers for both large and small chip orders, strengthens US AI leadership, and provides clarity to allied and partner nations on how they can benefit from artificial intelligence.” intelligence” as well as “builds on previous chips” controls to thwart smuggling, close other loopholes and AI security by raising standards.”
Asked if they had consulted with the incoming Trump administration on policy, National Security Advisor Jake Sullivan pointed to a “critical window of time” regarding competition with China, telling reporters on Sunday that the United States is only six to 18 months ahead of Beijing in AI technology.
“From our perspective, we have a national security responsibility to do two things. The first is to maintain, protect, and expand American AI leadership, particularly as they will be strategic competitors. the world, including the global design of data centers to run artificial intelligence applications,” Sullivan said.
President Biden will hand over power to President-elect Donald Trump on January 20. (Tasos Katopodis/Getty Images/Getty Images)
Sullivan said the final rule “ensures that the infrastructure for frontier AI training, the most amazing frontier AI systems, happens either in America or in the jurisdictions of our closest allies, and that those capabilities don’t go out like chips and batteries and other industries that we’ve had to invest hundreds of billions of dollars to bring back to shore.”
Speaking to Sullivan on Sunday, US Commerce Secretary Gina Raimondo explained to reporters how the final rule takes a three-pronged approach.
The secretary explained how it first works to “enhance and update control of advanced intelligence chips.” Second, as Raimondo classified it, the rule works to “create new controls for AI closed model weights; [to] make sure they don’t fall into the hands of our adversaries.” The third step, he said, involves “creating security conditions to protect critical technologies and the largest AI clusters” as well as “taking careful steps to ensure that the rule is targeted at: national security risks and allows trading to continue.”
Raimondo said the action is “intended to protect the most advanced AI technology and ensure it stays out of the hands of our foreign adversaries, but also to enable widespread dissemination and sharing of benefits with partner countries.”
Although the rule is not enforceable for 120 days, industry groups and chip company executives expressed concern that the administration would implement the complex rule in the final days of Biden’s term without consulting industry stakeholders, arguing that the framework undermines US interests and stifles innovation.
Mexico, Portugal, Israel and Switzerland are among the countries that may face additional restrictions.
NVIDIA, the California-based AI computing and technology giant, denied the final rule in a statement Monday.
National Security Advisor Jake Sullivan at the White House on November 13, 2024. (Alex Wong/Getty Images/Getty Images)
“In his final days in office, the Biden administration is seeking to undermine America’s leadership with a 200+ page regulatory mess crafted in secret and without adequate legislative review,” wrote Ned Finkle, vice president of government affairs at NVIDIA on how leading American semiconductors, computers, systems and even software are designed and marketed globally. And by trying to falsify market outcomes and stifle competition, the source of innovation, the Biden administration’s new rule threatens to squander America’s hard-won technological advantage.
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“Until the cape an “anti-China” measureThese rules will do nothing to increase US security,” Finkle added. “The new rules will control technology around the world, including technology that is already widely available for mainstream gaming computers. Instead of mitigating any threats, Biden’s new rules will only weaken them America’s global competitiveness by undermining the innovation that has kept America ahead.”
A technology industry group, the Information Technology Industry (ITI) Council, sent a letter to Raimondo last week requesting that the US government “publish any such proposed rule as a Notice of Proposed Rulemaking (NPRM) rather than an interim final or final rule.” , given the potentially significant geopolitical and economic implications of the proposed approach.”
ITI President Jason Oxman warned that the hasty framework proposed by the Biden-Harris administration would disrupt global supply chains and put the US at a disadvantage.
“As we understand it, the rule would impose global restrictions on the availability of integrated circuits regardless of cluster size or use case,” Oxman wrote. imposing arbitrary restrictions on the ability of US companies to sell key computing systems abroad If the US loses its edge in the global AI ecosystem, it will be difficult, if not impossible, to recover in the future.”
Commerce Secretary Gina Raimondo speaks in the State Department’s Treaty Room in Washington on Oct. 29, 2024. (ANDREW CABALLERO-REYNOLDS/AFP via Getty Images/Getty Images)
A White House fact sheet says the final rule removes restrictions on chip sales to 18 key allies and partners, including Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan and United Kingdom.
However, the rule believed other countries would be limited in the chips they could import. The White House said organizations that “meet high security and trust standards and are located with close allies and partners” could obtain what the United States would consider a highly trusted “Universal Verified End User” status.
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Purchases for non-status will be limited to 50,000 GPUs per country, but government-to-government agreements can be negotiated to increase the limit to 100,000.
Organizations located in other countries of concern to the US can apply for “National Verified End User” status, which will allow them to purchase 320,000 advanced graphics processing units over two years, but with some restrictions on the computing power of companies abroad will be applied by other institutions.
FOX Business’ Sarah Tobiansky contributed to this report.
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