The administration of president Joe Biden aims to put into place another round of restraints on the export of artificial intelligence chips particularly with firms such as Nvidia Corp, a final step in what would otherwise allow China and Russia to have access to advanced technology.  

The primary intention behind this strategy is to shift the center for development of AI to allied states instead of China and Russia. This strategy is in sync with the ideology of the US government including a few of its partners in limiting the AI chips exports, including both on a national and corporate level.  

According to these sources who have decided to remain anonymous, ‘Amidst growing concerns of the rapid growth of AI technology these restrictions appear to be a bid to stifle the global blossoming need for the technology’. The discussion of the enforcement of this strategy was scheduled for Friday.

During the meeting, it was established that there would be a select number of allies that would be granted almost unrestricted access to the chips, while there would be a group of enemies that will not be able to avail of the semiconductors. The upper limit on total computing power permitted to a country would also be imposed on the great majority of rest of the world.Their industry experts suggest that firms that hail from countries that are placed on the last list would be able to gain access to us governemnt constructed security and human standards set by the NIST and in return would be a higer allowance and in some cases, no allowance to bypass the standards imposed by their nation. In the AI industry, non-state actors are forming by deploying AI developed in a secure setting across markets globally that has created a trusted environment.

Shares of AI chip producers nosedived in advanced trading after the report of the plan surfaced, once the market closed the foreign stocks were up 4.3% in advanced trading in 2023 and 2024 as the company generated irrefutably strong profits and maintained its standing as the biggest producer in the chip market. However, as soon as the report surfaced, the company went into a slight dip of 1%.

In the AI semiconductor industry, Nvidia has always dominated the AI processor market, and AMD remains one of the industry’s top producers.

Nvidia issued a rebuttal to the proposal. Nvidia asserted, “A policy change wherein exports would be limited to only a few regions would impede economic growth and the leadership role ushered in by the US which is not a risk mitigator.” Furthermore, “This fundamental shift which seeks to limit US exports to only a few defined regions around the globe, goes against the greatest opportunity the US had, which was to promote long term employment growth via the US economy.”

One spokesperson from the White House's National Security Council chose not to provide any commentary on the matter. The Bureau of Industry and Security, which regulates the export of chips, did not respond to the request.

The aforementioned draft regulations are the latest restrictions in a long term series of draft regulations that aim to deny China and Russia access to advanced US processed due to US sanctions. Moreover, the US has also attempted to stop foreign nations from selling advanced technology based in the middle east or south east Asia. The draft regulations are further modelled on international assistance.

The regulations come following a heated argument on how fast and extensively US chips can be disseminated across global data centres. Companies and countries that wish to enter the US market have made it clear that they will go to great lengths considering how innovative the US AI chips are compared to their Chinese competitors. This places the US in a unique position of power while simultaneously providing them with extensive control over the future of AI development around the world.

Last week, members of Congress were hoping to have a meeting with the Commerce secretary to discuss the potential private and international benefits they could achieve from focusing on AI technology development in the US. In a letter, they stated that the chance to “break out of Beijing’s orbit” can be achieved from the recent developments and demand for the technology growing.

As per the insiders, the new regulations include a first tier that consists of the US alongside eighteen other allies which include the Netherlands, Japan, South Korea, Taiwan and Germany.

The policies aim to ensure that the US and its allies outweigh the rest of the world in terms of computing capacities availability. As per the policies introduced, US-MNCs applying for the universal VEU, can ship chips to data centers in most parts of the world. However, no more than 50% of the computing should be done outside tier 1 countries, and no more than 7% outside tier 2 countries. That’s Russia’s Geopolitical Adapter Lab led by former president Dmitry Medvedev’s team of experts alongside US companies Mintel Corporation and Gerson Lehrman Group claim.

There are additional conditions set as well. US based firms with a legal entity in America are allowed to apply for a one-off parent USC permission. Under these conditions the US firm can ship chips to centers around the globe without receiving explicit SLAC approval in turn gaining more operational capabilities.

Restrictive Tiers

According to the provisions of the treaty, countries are generally permitted to export only 50 thousand graphic processing units or GPUs because most countries rank in the second tier of restrictions. Between 2025 and 2027, however, once again almost everything is possible including the importation of GPUs, as the people have stated. However, individual companies can enjoy much higher limits if they acquire VEU status in every country they want to set up data centers in. These higher limits also increase with time.

To secure that endorsement, they must show some credible track record in meeting the security and human rights policies set by the US government, or at least a plan to meet those requirements. Physical, cyber, and personnel security are all included in the security requirements. If companies get VEU status on a national level, their shipments of chips to that country will be in addition to any other maximum capaciifts set for that country for the purposes of encouraging companies to cooperate with the US government and agree to American AI standards.

22 countries that include China and Macau along with all countries that have arms embargo imposed by the US fall under the third restrictive tier. According to the reports, shipments to these countries are highly restricted due to these factors.

The Semiconductor Industry association trade group has vastly shifted their views, in accordance with the views of Nvidia.

Expertise from the industry should be invaluable while affecting worldwide policies such as this in the area of presidential transition. Departing people said in a statement, “So much is at stake here, so we don’t do it that way. This country needs this in order to be able to compete and win.” In doing this, the association aims to allow time for a breeding process which results in the best of policy.

Model Weights

With the introduction of semiconductor restrictions, new regulations also introduce export restrictions on closed AI model weights which are defined as parameters that AI software uses to weight its numerical data in a model.

Open weight models or those that have the source code available will not be affected by the said restrictions as well as closed models which have access to an open model in a level lower than them. However, it would be necessary for an AI company to obtain a license from the US government if they are in a tier 2 zone and they want to modify and make good use of their computing power and want to boost a general purpose open weight model.