AI Chip Production Grows: U.S. Works to Protect the Good from the Bad and Ugly

Biden Proposes New Rules for Exporting AI Chips 

AI story on President Biden’s move to restrict AI technology aboard from AP News with this headline (edited and formed for the blog):

“Biden administration proposes new rules on exporting AI chips, provoking an industry pushback”

WASHINGTON (AP) - The Biden administration is proposing a new framework for exporting of advanced computer chips used in the development of AI  in an attempt to balance national security concerns about the technology with the economic interests of producers and other countries.

But the framework proposed raises concerns of industry executives who say the rules would limit access to existing chips used for video games and restrict in 120 countries the chips used for data centers and AI products. Mexico, Portugal, Israel, and Switzerland are among the nations that could have limited access.

Commerce Secretary Gina Raimondo said on a call with reporters previewing the framework that it's: “Critical to preserve America's leadership in AI and the development of AI-related computer chips.”

Raimondo further said: “As AI becomes more powerful, the risks to our national security become even more intense. The framework is designed to safeguard the most advanced AI technology and ensure that it stays out of the hands of our foreign adversaries but also enabling the broad diffusion and sharing of the benefits with partner countries.”

The fast-evolving AI technology enables computers to produce novels, make scientific research breakthroughs, automate driving, and foster a range of other transformations that could reshape economies and warfare. 

White House national security adviser Jake Sullivan stressed that the framework would ensure that the most cutting-edge aspects of AI would be developed within the United States and with its closest allies, instead of possibly getting offshore such as the battery and renewable energy sectors.

AI Industry Responses:

1. The Information Technology Industry Council, warned Raimondo in a letter last week that a hastily implemented new rule from the Democratic administration could fragment global supply chains and put U.S. companies at a disadvantage.

2. The Semiconductor Industry Association (SIA), said Monday it was disappointed that the policy was being “rushed out the door” before a presidential transition.

3. SIA President and CEO John Neuffer said: “The new rule risks causing unintended and lasting damage to America’s economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors.”

4. Ned Finkle, vice president of external affairs at Nvidia, said in a statement: “The prior Trump administration had helped create the foundation for AI's development and that the proposed framework would hurt innovation without achieving the stated national security goals. While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance U.S. security. The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware.”

Under the framework, 18 U.S. allies and partners would face no restrictions on chips. Other countries would face caps on the chips they could import according the fact sheet from the White House.

Those key U.S. allies without restrictions include: Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, South Korea, Spain, Sweden, Taiwan, and the UK.

Users outside of these close allies could purchase up to 50,000 graphics processing units per country. There would also be government-to-government deals which could bump up the cap to 100,000 if their renewable energy and technological security goals are aligned with the United States.

Institutions in certain countries could also apply for a legal status that would let them purchase up to 320,000 advanced graphics processing units over two years. Still, there would be limits as to how much AI computational capacity could be placed abroad by companies and other institutions.

Also, computer chip orders equivalent to 1,700 advanced graphics processing units would not need a license to import or count against the national chip cap, among the other standards set by the framework. 

The exception for the 1,700 graphics processing units would likely help to meet the orders for universities and medical institutions, as opposed to data centers.

The new rules are not expected to hinder the AI-driven data center expansion plans of leading cloud computing providers such as Amazon, Google, and Microsoft because of exemptions for trusted companies seeking large clusters of advanced AI chips.

Brad Smith, Microsoft’s president, in a statement said: “We’re confident we can 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.” 

NOTES:

1. Based in Abu Dhabi, G42, runs data centers in the Middle East and elsewhere, and has built what’s considered to be the world’s leading Arabic-language AI model, and they have ties to China.

2. Microsoft drew scrutiny last year after it announced a $1.5 billion investment in a technology firm based in the United Arab Emirates and overseen by the country’s powerful national security adviser (more on that here M/S - G42 deal)

3. That has led some GOP members of Congress to call for special scrutiny of that AI partnership and urge Biden officials to implement: “More robust national security guardrails to prevent key U.S. technology from falling into China’s hands.”

My 2 Cents: Those move by President Biden is smart and wise – as AI grows, and is surely will, so does the threat by bad actors across the globe who, and let’s face it, are not U.S. friendly. 

Simply stated, AI has elements of being “the good, the bad, and the ugly.” Awareness is critical.

Remember this about AI: “Artificial Intelligence” the first letter in the first word means: NOT REAL or MADE UP.

Now, the key question is what are those guardrails and how will they be monitored, enforced, but more importantly what will be the penalties for any AI nastiness by those U.S. adversaries? 

Time will tell for sure and vigilance is the operative word from here on out.

We shall see – but with an emphasis also on what will the Trump administration do. Will they support this major important move or will they try to reverse it for political gain?

I think the answer to that question is critical – so stay tuned.

Thanks for stopping by.