New US Law Aims to Ban China’s Access to AI Chips and Models by Banning the World

The Biden administration announced a bold and controversial new export plan today, designed to curb high-end chips and artificial intelligence they take it upon themselves to perish in the hands of the enemy such as China.

The administration’s new “AI Diffusion” rule divides the world into countries that are allowed access to America’s most advanced AI silicon and algorithms, and those that will need special permits to access the technology. The law, which will be enforced by the Commerce Department of Industry and Security, also aims to ban the movement of the most powerful AI models for the first time.

“The US is leading the world in AI now, AI development and AI chip design, and it’s important that we keep it that way,” US Commerce Secretary Gina Raimondo said before today’s announcement.

The list of trusted countries is UK, Canada, Australia, Japan, France, Germany, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden and Taiwan.

Foreign companies that are not regulated by the equipment will be able to access up to 1,700 of the latest AI chips without special permission, the law says. They will be able to apply for a special license to obtain more chips, build larger datacenters using US technology, or gain access to more powerful “wealths” closed to US companies. Companies will need to have adequate physical and cyber security in place to obtain approval.

Assembling activities, including the creation, production, and storage of chips are exempt from the law. This law will also not prohibit Open source AI examples like Meta’s Llama, management says.

Countries with armed forces like China, Iran, and North Korea are already banned from getting more chips. The new law for the first time will prevent them from getting high quality models.

“Semiconductors whose power (AI) and model weights are, as we all know, a dual-use technology,” Raimondo added ahead of the announcement. “They are used for many commercial purposes, but they can also be used by our adversaries to test nuclear weapons, develop weapons and advance their military forces.”

The law is bound to cause controversy, as it could disrupt the global AI market at a critical time for the industry. It’s only one week until Trump’s inauguration. The decision sets a 120-day consultation period, meaning the Trump administration is expected to listen to the proposal, possibly change the law, and then implement it.

Nvidiaand the world’s largest manufacturer of AI chipscalled the law “unprecedented and wrong” in blog post. “Even if they are covered in an ‘anti-China’ strategy, these rules will do nothing to strengthen US security. Instead of reducing any threat, Biden’s new rules will only weaken America’s global competitiveness, disrupting the innovation that has made the US progress.”

US already limits the export of advanced AI chips to Chinaa major political enemy, but companies there can create cutting-edge solutions using computer teams located in other countries. Under the new law, China cannot create so-called AI frontiers in other countries affected by the law.