The Biden administration has announced new restrictions on the export of advanced chips essential for artificial intelligence (AI), citing national security concerns regarding the use of American-made AI technology by foreign adversaries. This "AI diffusion" rule, rolled out recently, introduces caps on chip sales to most countries while exempting 18 U.S. allies and partners from these restrictions. Commerce Secretary Gina Raimondo indicated that this policy aims to create a trusted technological ecosystem and mitigate national security risks without hindering innovation or the technological leadership of the U.S.


Under the new framework, most chip sales will require licenses, with limitations based on the U.S.'s relationship with a given country. Non-allied countries can purchase up to 50,000 advanced graphics processing units (GPUs), potentially doubling this limit through governmental agreements. Individual entities may also seek special status to acquire up to 320,000 advanced GPUs intended for the development of data centers. Notably, smaller shipments of up to 1,700 advanced GPUs will not require licenses and will not contribute to the country-specific chip limits.




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This ruling has faced significant backlash from the semiconductor industry, with Nvidia describing it as "unprecedented and misguided," warning it could hinder innovation and economic growth. The Semiconductor Industry Association (SIA) expressed strong disappointment, indicating that the rule could damage the U.S. economy and its competitive edge in the semiconductor and AI sectors by conceding critical markets to global competitors.