Key points
- Nvidia shares dip more than one per cent in late trading
- Plan will result in an expansion of semiconductor caps
- US has sought to prevent adversaries from accessing US tech through intermediaries
ISLAMABAD: The United States (US) President Joe Biden’s administration plans one more round of restrictions on the export of artificial intelligence chips from the likes of Nvidia just days before leaving office, a final attempt in his effort to keep advanced technologies out of the hands of China and Russia.
According to the Japan Times, the US wants to curb the sale of AI chips used in data centers on both a country and company basis, with the goal of concentrating AI development in friendly nations and getting businesses around the world to align with American standards, according to people familiar with the matter.
The result would be an expansion of semiconductor caps to most of the world — an attempt to control the spread of AI technology at a time of soaring demand. The regulations, which could be issued as soon as Friday, would create three tiers of chip trade restrictions, said the people, who asked not to be identified because the discussions are private.
Blocking adversaries
At the top level, a small number of US allies would maintain essentially unmitigated access to American chips. A group of adversaries, meanwhile, would be effectively blocked from importing the semiconductors. And the vast majority of the world would face limits on the total computing power that can go to one country.
Countries in the last group would be able to bypass their national limits — and get their own, significantly higher caps — by agreeing to a set of US government security requirements and human rights standards, one of the people said. That type of designation — called a validated end user — aims to create a set of trusted entities that develop and deploy AI in secure environments around the world.
Shares take a hit
Shares of Nvidia, the leading maker of AI chips, dipped more than one per cent in late trading after the plan was reported on. They had been up 4.3 per cent this year through the close, following stratospheric gains in 2023 and 2024 that turned the company into the world’s most valuable chipmaker.
Nvidia objected to the proposal in a statement. “A last-minute rule restricting exports to most of the world would be a major shift in policy that would not reduce the risk of misuse but would threaten economic growth and US leadership,” Nvidia said.
Every data center and business is already incorporating AI through what the company calls accelerating computing, Nvidia said. “The worldwide interest in accelerated computing for everyday applications is a tremendous opportunity for the US. to cultivate, promoting the economy and adding US jobs,” the chipmaker said.
A last-minute rule restricting exports to most of the world would be a major shift in policy that would not reduce the risk of misuse but would threaten economic growth and US leadership.” Nvidia says.
The measures build on years of curbs that already limited the ability of American chipmakers such as Nvidia and Advanced Micro Devices to sell advanced processors in China and Russia. The US also has sought to prevent adversary nations from accessing cutting-edge US technology through intermediaries in places such as the Middle East and Southeast Asia. Data centres are strategically crucial because companies use them to develop and run AI models, sometimes across national borders.
A representative of the White House’s National Security Council declined to comment. The Commerce Department’s Bureau of Industry and Security, which is in charge of chip export controls, did not immediately respond to a request for comment, the Japan Times reported.
Russia-China cooperation
It is important to note that Russian President Vladimir Putin has ordered the Russian government and the top bank to develop AI cooperation with China, Reuters reported in the beginning of the month.
Putin had earlier announced that Russia would team up with BRICS partners and other countries to develop AI.
He told the government and Sberbank, which is spearheading Russia’s AI efforts, to “ensure further co-operation with the People’s Republic of China in technological research and development in the field of artificial intelligence”, Reuters reported.
China’s “iconic advances”
According to Time, in 2017, Beijing unveiled an ambitious roadmap to dominate artificial intelligence development, aiming to secure global leadership by 2030. By 2020, the plan called for “iconic advances” in AI to demonstrate its progress.
Without cutting-edge chips, Beijing’s goal of AI supremacy by 2030 appeared increasingly out of reach.
In November last year, Alibaba and Chinese AI developer DeepSeek released reasoning models that, by some measures, rival OpenAI’s o1-preview. The same month, Chinese videogame juggernaut Tencent unveiled Hunyuan-Large, an open-source model that the company’s testing found outperformed top open-source models developed in the US across several benchmarks. Then, in the final days of 2024, DeepSeek released DeepSeek-v3, which now ranks highest among open-source AI on a popular online leaderboard and holds its own against top performing closed systems from OpenAI and Anthropic, the Time reported.
