President Joe Biden’s final days in office seemed all about cementing the United States’ well-established lead over China in the market for artificial intelligence. The administration’s methods — focused on severing China’s access to AI by regulating global access to advanced semiconductors — were met with nods of approval from policy experts but annoyance from the chip industry, namely Nvidia (NVDA).
On Wednesday, the Biden administration unveiled its third round of export restrictions in three days aimed at thwarting China’s ability to access the most advanced chips needed to power artificial intelligence.
“As the Land of Liberty, America — not China — must lead the world in the development of AI,” the outgoing president said in his farewell address to the nation Wednesday evening.
In the latest round of restrictions, the US Department of Commerce unveiled new licensing requirements for foundries — manufacturers like Taiwan Semiconductor Manufacturing Company (TSM) who make chips for other companies — and blacklisted 16 additional Chinese companies.
The point of the latest wave of rules Wednesday was mainly to limit Chinese technology firm Huawei’s ability to order AI chips through shell companies from TSMC and to prevent Chinese chipmaker CXMT from buying advanced chip manufacturing equipment, Wadhwani AI Center director and AI policy expert Gregory C. Allen explained in a podcast appearance late Wednesday.
The Trump administration banned Chinese smartphone maker Huawei from buying American technology in 2020, believing the company was operating under the influence of China’s government.
The rules won’t hit TSMC too hard, though.
TSMC Chairman and CEO C.C. Wei said in a call with Wall Street analysts Thursday that the new rules are “manageable.”
“My customers who are being restricted, we are applying for the special permit for them,” he said, “We have confidence that they will get some permission, so long as they are not in the AI area.”
The announcement Wednesday followed two other rounds of restrictions.
The so-called AI Diffusion rule released Monday would limit the amount of AI chips countries can purchase from US companies without obtaining a special license, with the aim of thwarting chip smuggling to China. The new rule also added incentives for companies to build AI data centers in the US and would make it more difficult for companies to build data center infrastructure abroad. And an executive order on AI Thursday aimed to accelerate the construction of AI data centers domestically.
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