The Biden administration intends to impose additional export restrictions on AI chips, including those produced by NVIDIA, just days before President Joe Biden leaves office. This move represents his final effort to prevent advanced technology from falling into the hands of China and Russia.
On Wednesday, an anonymous government official revealed that the U.S. intends to limit the sale of AI chips used in data centers to these nations and certain corporations. The objective is to concentrate AI development in allied countries and ensure global compliance with U.S. standards.
The new regulations, expected to be announced on Friday, will introduce a three-tiered system for chip transaction restrictions.
At the top tier, a select group of U.S. allies will retain nearly unrestricted access to American chips.
Adversarial nations, on the other hand, will face near-total bans on semiconductor imports. The remaining countries will be subject to restrictions on the total computing power allocated to any single nation.
This expansion of semiconductor caps aims to control the spread of AI technology amidst surging demand worldwide.
Following the announcement by the U.S. government, shares of NVIDIA, the world’s leading manufacturer of AI chips, fell by over 1% in late trading. NVIDIA, which experienced a meteoric rise in 2023 and 2024, remains the most valuable chip manufacturer globally, with its stock up 4.3% year-to-date.
In a statement, NVIDIA expressed opposition to the new restrictions. It stated that the last-minute regulations limiting most global exports will fail to reduce the risk of misuse and represent a significant policy shift that threatens economic growth and U.S. leadership.
NVIDIA emphasized that all data centers and businesses already integrate AI through accelerated computing. The company argued that the growing global interest in accelerated computing for everyday applications presents a significant opportunity for the U.S. to foster economic growth and create American jobs.
These latest restrictions build upon years of regulations that have already limited the sale of advanced processors by U.S. chip manufacturers like NVIDIA and AMD to China and Russia.
The U.S. has also worked to prevent adversaries from accessing advanced technology through intermediaries in regions such as the Middle East and Southeast Asia. Data centers remain strategically vital as companies use them to develop and operate AI models.
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