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Biden administration adopts rules to guide AI’s global spread

Writer's picture: The San Juan Daily StarThe San Juan Daily Star


Computer chips are tested at a factory in Austin, Texas, Nov. 25, 2024. The Biden administration issued sweeping rules on Monday, Jan. 13, 2025, governing how A.I. chips and models can be shared with foreign countries, in an attempt to set up a global framework that will guide how artificial intelligence spreads around the world in the years to come. (Spencer Lowell/The New York Times)
Computer chips are tested at a factory in Austin, Texas, Nov. 25, 2024. The Biden administration issued sweeping rules on Monday, Jan. 13, 2025, governing how A.I. chips and models can be shared with foreign countries, in an attempt to set up a global framework that will guide how artificial intelligence spreads around the world in the years to come. (Spencer Lowell/The New York Times)

By Ana Swanson


The Biden administration issued sweeping rules earlier this week governing how artificial intelligence chips and models can be shared with foreign countries, in an attempt to set up a global framework that will guide how AI spreads around the world in the years to come.


With the power of AI rapidly growing, the Biden administration said the rules were necessary to keep a transformational technology under the control of the United States and its allies, and out of the hands of adversaries that could use it to augment their militaries, carry out cyberattacks and otherwise threaten the United States.


Tech companies have protested the new rules, saying they threaten their sales and the future prospects of the U.S. tech industry.


The rules put various limitations on the number of AI chips that companies can send to different countries, essentially dividing the world into three categories. The United States and 18 of its closest partners — including Britain, Canada, Germany, Japan, South Korea and Taiwan — are exempted from any restrictions and can buy AI chips freely.


Countries that are already subject to U.S. arms embargoes, like China and Russia, will continue to face a previously existing ban on AI chip purchases.


All other nations — most of the world — will be subject to caps restricting the number of AI chips that can be imported, though countries and companies are able to increase that number by entering into special agreements with the U.S. government. The rules could rankle some foreign governments: Even countries that are close trading partners or military allies of the United States, such as Mexico, Switzerland, Poland or Israel, will face restrictions on their ability to purchase larger amounts of American AI products.


In a statement, the European Commission said Monday that it had shared its concerns about the measures with the Biden administration.


“We are concerned about the U.S. measures adopted today restricting access to advanced AI chip exports for selected EU member states and their companies,” the commission said, adding that European countries are “an economic opportunity for the U.S., not a security risk.”


The rules are aimed at stopping China from obtaining from other countries the technology it needs to produce AI, after the United States banned such sales to China in recent years.


But the regulations also have broader goals: having allied countries be the location of choice for companies to build the world’s biggest data centers in an effort to keep the most advanced AI models within the borders of the United States and its partners.


Governments around the world, particularly in the Middle East, have been pumping money into attracting and building enormous data centers, in a bid to become the next center for AI development.


Jake Sullivan, President Joe Biden’s national security adviser, told reporters Sunday that the rule would ensure that the infrastructure for training the most advanced AI would be in the United States or in the jurisdiction of close allies, and “that capacity does not get offshored like chips and batteries and other industries that we’ve had to invest hundreds of billion dollars to bring back onshore.”


Sullivan said the rule would provide “greater clarity to our international partners and to industry,” while countering national security threats from malicious actors that could use “American technologies against us.”


It will be up to the Trump administration to decide whether to keep the new rules or how to enforce them. In a call with reporters Sunday, Biden administration officials said the rules had bipartisan support and that they had been in consultations with the incoming administration about them.


Though companies in China have begun to develop their own AI chips, the global market for such semiconductors is dominated by U.S. companies, particularly Nvidia. That dominance has given the U.S. government the ability to regulate the flow of AI technology worldwide, by restricting U.S. company exports.


Companies have protested those limitations, saying the restrictions could hamper innocuous or even beneficial types of computing, anger U.S. allies and ultimately push global buyers into buying non-American products, like those made by China.


In a statement, Ned Finkle, Nvidia’s vice president for government affairs, called the rule “unprecedented and misguided” and said it “threatens to derail innovation and economic growth worldwide.”


“Rather than mitigate any threat, the new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the U.S. ahead,” he said. Nvidia’s stock dipped nearly 2% Monday.


Brad Smith, the president of Microsoft, said in a statement that the company was confident it could “comply fully with this rule’s high security standards and meet the technology needs of countries and customers around the world that rely on us.”


In a letter to congressional leadership Sunday that was viewed by The New York Times, Jason Oxman, the president of the Information Technology Industry Council, a group representing tech companies, asked Congress to step in and use its authority to overturn the action if the Trump administration did not.


John Neuffer, the president of the Semiconductor Industry Association, said his group was “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.”


“The stakes are high, and the timing is fraught,” Neuffer said.


The rules, which run more than 200 pages, also set up a system in which companies that operate data centers, like Microsoft and Google, can apply for special government accreditations.


In return for following certain security standards, these companies can then trade in AI chips more freely around the globe. The companies will still have to agree to keep 75% of their total AI computing power within the United States or allied countries, and to locate no more than 7% of their computing power in any single other nation.


The rules also set up the first controls on weights for AI models, the parameters unique to each model that determine how AI makes its predictions. Companies setting up data centers abroad will be required to adopt security standards to protect this intellectual property and prevent adversaries from gaining access to it.


Governments facing restrictions can raise the number of AI chips they can import freely by signing agreements with the U.S. government, in which they would agree to align with U.S. goals for protecting AI.


Under the guidance of the U.S. government, Microsoft struck an agreement to team up with an Emirati firm, G42, last year, in return for G42 eliminating Huawei equipment from its systems and taking other steps.

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