The United States unveiled new export rules Monday on chips used for artificial intelligence, furthering efforts to make it tough for China and other rivals to access the advanced technology in Joe Biden鈥檚 final days as president.
The restrictions were announced in 2023 on exporting certain AI chips to China, which the United States sees as a strategic competitor. But they drew fiery pushback from Beijing.
In recent years, Washington has expanded its efforts to curb exports of state-of-the-art chips to China, which can be used in AI and weapons systems, as Beijing鈥檚 tech advancements spark concern among policymakers.
鈥楾he US leads the world in AI now 鈥撯�� both AI development and AI chip design 鈥撯�� and it's critical that we keep it that way,鈥� US commerce secretary Gina Raimondo told reporters.
The new rules update controls on chips, requiring authorizations for exports, re-exports and in-country transfers 鈥撯�� while also including a series of exceptions for countries considered friendly to the United States.
AI data centers meanwhile will need to comply with enhanced security parameters to be able to import chips.
China鈥檚 commerce ministry called the announcement 鈥榓 flagrant violation鈥� of international trade rules, vowing that Beijing would 鈥榝irmly safeguard鈥� its interests.
The latest move also drew industry criticism and warnings that it would hurt US competitiveness.
Semiconductor Industry Association chief executive John Neuffer said, 鈥榃e鈥檙e deeply disappointed that a policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry.鈥�
He added in a statement that the rule could cause 鈥榣asting damage to America's economy and global competitiveness鈥� by ceding key markets to rivals.
Chip titan Nvidia said in a blog post that 鈥榳hile cloaked in the guise of an 鈥渁nti-China鈥� measure, these rules would do nothing to enhance US security.鈥�
The rules make it 鈥榟ard for our strategic competitors to use smuggling and remote access to evade our export control,鈥� White House national security adviser Jake Sullivan said.
They also create 鈥榠ncentives for our friends and partners around the world to use trusted vendors for advanced AI,鈥� he added.
The new rules will take effect in 120 days, Raimondo said, giving the incoming administration of president-elect Donald Trump time to potentially make changes.
Freezing the rule, however, could backfire as it risks allowing China to stockpile US hardware or set up facilities in third countries, a senior US official told reporters.
And the Computer & Communications Industry Association cautioned that the rule will hamper the ability of US firms to deploy advanced semiconductors in data centers abroad.
In its post, Nvidia stressed that the first Trump term showed how the United States 鈥榳ins through innovation, competition and by sharing our technologies with the world 鈥撯�� not by retreating behind a wall of government overreach.鈥�
Trump put heavy tariffs on China during his first presidential term.
But his backers in Silicon Valley could also see the rules as an undue burden on their ability to export products.
On Monday, Nvidia shares slid 2.7 per cent around midday, while Intel shares lost 0.3 per cent.
The Information Technology and Innovation Foundation said that pressuring countries to choose between Washington and Beijing could alienate partners and boost China鈥檚 position in the global AI ecosystem.
鈥楳any countries may opt for the side offering them uninterrupted access to the AI technologies vital for their economic growth and digital futures,鈥� said ITIF vice-president Daniel Castro.
