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US tightens export controls on advanced AI technologies

The US Department of Commerce's Bureau of Industry and Security (BIS) has issued an interim final rule, effective January 13, 2025, enhancing export controls on advanced computing ICs and certain artificial intelligence (AI) model weights.

This measure aims to safeguard national security and foreign policy interests by regulating the distribution of dual-use AI technologies.

The new rule mandates that exporters, reexporters, and transferors comply with these changes within 120 days from the publication date in the Federal Register.

BIS states that these measures aim to protect US national security and foreign policy interests. To balance security with innovation, BIS has also added license exceptions and updated the Data Center Validated End User program, allowing exports to destinations that pose no security concerns. In more simple terms, the new regulations would establish a three-tier system of chip trade limitations – in order to prevent advanced technology from entering into the hands of countries such as China and Russia.

According to reports from Technews, Bloomberg, and The Register, the US and 18 allied countries — including Germany, Japan, the Netherlands, South Korea, and Taiwan — will have unrestricted access to advanced US-developed technologies.

However, companies from these nations may install a limited amount of their processors in Tier 2 countries, with a cap of 7% of their capacity in any single Tier 2 country. Additionally, US-based companies must reportedly keep at least 50% of their computing power within the United States.

Most countries worldwide, including those in Eastern Europe, the Middle East, Mexico, and Latin America, may face certain restrictions on the advanced technologies they can access. According to Bloomberg, the constraints include a cap of around 50,000 GPUs between 2025 and 2027 –however, it is unclear which GPUs are covered.

Countries such as China, Russia, Belarus, Iran, Macau, and other nations subject to US arms embargoes will reportedly be entirely prohibited from obtaining advanced US technologies.

The BIS states that the interim final rule reflects the US government's commitment to balancing technological advancement with national security imperatives. By tightening controls on sensitive AI-related exports, the administration seeks to prevent the misuse of advanced technologies while supporting innovation and international cooperation among trusted partners.

Nvidia: "a sweeping overreach"

Ned Finkle, vice president of government affairs at Nvidia, penned a response to what he calls a "misguided ‘AI Diffusion’ rule".

He states that companies, startups, and universities worldwide are using AI to improve healthcare, agriculture, manufacturing, education, and more, driving economic growth and innovation. Powered by American technology, global AI adoption creates opportunities for industries both in the US and internationally.

However, this global development is now – according to Ned Finkle – in jeopardy.

"The Biden Administration now seeks to restrict access to mainstream computing applications with its unprecedented and misguided “AI Diffusion” rule, which threatens to derail innovation and economic growth worldwide."

He argues that the Biden Administration is undermining America’s leadership with an extensive 200+ page set of regulations, drafted in secrecy and without proper legislative oversight. 

"This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally."

By attempting to manipulate market outcomes and suppress competition — the driving force behind innovation — the new rule risks eroding America’s hard-earned technological edge. Although presented as an “anti-China” measure, Finkle argues that these rules do nothing to enhance US security. Instead, they aim to control technology globally, even technology already common in gaming PCs and consumer hardware. 

"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," Finkle concludes.

Europe joins the protests

The European Commission released a joint statement from Executive Vice-President Henna Virkkunen and Commissioner Maroš Šefčovič voicing concern about the US measures adopted – which restrict access to advanced AI chip exports for selected EU Member States and their companies. 

"We believe it is also in the US economic and security interest that the EU buys advanced AI chips from the US without limitations: we cooperate closely, in particular in the field of security, and represent an economic opportunity for the US, not a security risk," the statement reads.

Virkkunen and Šefčovič note that they have raised their concerns with the U.S. administration and are confident in finding a solution to maintain a secure transatlantic supply chain for AI and supercomputers, benefiting companies and citizens on both sides of the Atlantic.


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