Nvidia snaps back at Biden's 'innovation-killing' AI chip export restrictions

Nvidia has hit back at the outgoing Biden administration's AI chip tech export restrictions designed to tighten America's stranglehold on supply chains and maintain market dominance.

The White House today unveiled what it calls the Final Rule on Artificial Intelligence Diffusion from the Biden-Harris government, placing limits on the number of AI-focused chips that can be exported to most countries, but allowing exemptions for key allies and partners.

it is essential that ... the world's AI runs on American rails...

The intent is to work with AI companies and foreign governments to initiate critical security and trust standards as they build out their AI infrastructure, but the regulation also makes it clear that the focus of this policy is "to enhance US national security and economic strength," and "it is essential that ... the world's AI runs on American rails."

Measures are intended to restrict the transfer to non-trusted countries of the weights for advanced "closed-weight" AI models, and set out security standards to protect the weights of such models.

However GPU supremo Nvidia claims the proposed rules are so harmful that it has published a document strongly criticizing the decision.

"In its last days in office, the Biden administration seeks to undermine America's leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review," said VP of government affairs Ned Finkle.

"This sweeping overreach would impose bureaucratic control over how America's leading semiconductors, computers, systems and even software are designed and marketed globally. And by attempting to rig market outcomes and stifle competition – the lifeblood of innovation – the Biden administration's new rule threatens to squander America's hard-won technological advantage," the company claims.

Nvidia shares were down by 4 percent in response to the news, according to MarketWatch, which published an alarming claim that 80 percent of the market for GPUs may evaporate if the policy is enacted.

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The rules, which The Register understands are set to take effect 120 days from publication, establish caps on the volume of AI silicon that can be sold to most countries, a clear attempt to curb the amount of processing power that other nations can bring to bear on AI development.

According to CNBC, a select group of trusted countries, including Japan, UK, South Korea, and the Netherlands, will effectively be exempt from the rules. A larger group of other nations, including Singapore, Israel, Saudi Arabia, and the United Arab Emirates, will face caps, while Uncle Sam's favorite bad guys such as Russia, China, and Iran are to be banned from getting their hands on the technology at all – if such bans ever work in practice.

"This policy will help build a trusted technology ecosystem around the world and allow us to protect against the national security risks associated with AI, while ensuring controls do not stifle innovation or US technological leadership," said US Secretary of Commerce, Gian Raimondo.

"Managing these very real national security risks requires taking into account the evolution of AI technology, the capabilities of our adversaries, and the desire of our allies to share in the benefits of this technology. We've done that with this rule, and it will help safeguard the most advanced AI technology and help ensure it stays out of the hands of our foreign adversaries, while we continue to broadly share the benefits with partner countries."

Reports also indicate that hyperscale operators such as Microsoft and Amazon will be required to seek global authorization to build datacenters hosting GPUs outside of the US. They will need to abide by certain conditions and restrictions such as security requirements.

Finkle at Nvidia thundered: "While cloaked in the guise of an 'anti-China' measure, these rules would do nothing to enhance US security." He claimed the new rules would control technology worldwide, including much that is already widely available in mainstream 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 US ahead," Nvidia claims. ®