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Biden administration to place new, last-minute export controls on AI semiconductors: Report

Published: 09 Jan. 2025, 14:37

LIM JEONG-WON
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[SHUTTERSTOCK]

The U.S. Joe Biden administration is expected to introduce new export control regulations on semiconductors needed for AI development just as the administration nears its end in mid-January, Bloomberg reported on Wednesday.

If implemented, only U.S. allies will face no import restrictions, while purchases by other countries will likely be restricted.

According to Bloomberg, the Biden administration is expected to announce regulations on Friday that would further restrict the export of semiconductors needed for AI development by U.S. semiconductor companies such as Nvidia. This is just ten days before the inauguration of the second term of U.S. President-elect Donald Trump.

Through this measure, the Biden administration plans to focus AI development on allied countries. Sales will be restricted by country and company, and countries will be divided into three tiers.

In the top tier will be a small number of U.S. allies who can continue purchasing U.S. semiconductors without restrictions. According to Bloomberg, this includes Asian allies such as South Korea, Japan and Taiwan, as well as major Western countries such as Britain, France, Germany and Canada.

The second tier of countries will have a limit on the amount of semiconductors they can import. Even in this case, if they meet the U.S. government's security requirements and human rights standards, they can import semiconductors in numbers far above the initially imposed limit.

On the other hand, third-tier countries such as China, Russia, North Korea, Iran, Venezuela, Cuba, Belarus, Iraq and Syria would be effectively blocked from importing U.S.-made semiconductors.

Bloomberg reported that the measure aims to prevent the leak of advanced American technology to hostile countries such as China and Russia and to focus AI technology development on friendly countries.

In implementing this measure, the U.S. government plans to utilize the "verified end user" (VEU) regulation, a comprehensive license that allows the export of designated items only to companies approved in advance. The purpose is to create a group of countries and companies that develop and use AI in a safe and reliable environment.

The U.S. government previously used the VEU regulation to control the export of U.S. semiconductor equipment to China in 2023, while allowing exceptions for local factories in China owned by Samsung Electronics and SK hynix.

The Biden administration has previously controlled semiconductor exports by U.S. semiconductor companies such as Nvidia and AMD to China and Russia through several regulations.

U.S. semiconductor companies have expressed concerns that the measure will harm their exports.

Nvidia expressed its opposition through Bloomberg, saying that 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 U.S. leadership.”

The Semiconductor Industry Association also expressed concern that “a policy change of this scope and significance should not be rushed out the door during a period of presidential transition and without meaningful input from the industry.

“Too much is at stake here to circumvent a deliberative process," it added. "Our country needs to get this right so we can compete and win globally.”

BY SUH YOU-JIN, LIM JEONG-WON [[email protected]]