Outrage for Bidens final AI crackdown

In its last week in office, the Biden Administration has issued a 168-page framework, titled the “Interim Final Rule on AI diffusion” (which is open to the public for comment for 120 days), which introduces new AI chip export restrictions.

The ruling splits the world into three groups.

Group 1 contains America’s biggest allies, which include Japan, South Korea, the UK, Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, and Taiwan, and none of these countries will be affected by the new framework.

Group 2 contains America's strongest strategic rivals, including Russia and China, and strengthens the already-existing export restrictions that stop these countries from buying advanced US-made AI chips, by introducing new guidelines around “closed AI models.”

Group 3 contains most of the rest of the world, and includes countries like Mexico, Portugal, and Israel, who are neither strong allies nor threatening rivals to the US. This group now has a cap on the number of AI chips they’re allowed to purchase (50,000 per country), which is designed to stop US rivals (like China and Russia) from exploiting a loophole in America’s export system and purchasing advanced chips via these countries. It could, of course, stop this, but at the expense of allowing these countries to develop AI systems.

The framework, which could change at the end of the month, as the Trump administration moves into office, has been met with frustration by those likely to be affected, which includes China and NVIDIA (as they own 90% of the AI chip market).

China believes it’s a “flagrant violation of international multilateral economic and trade rules," and NVIDIA issued a scathing statement calling the guidelines “unprecedented and misguided” believing they will only “derail innovation and economic growth worldwide.”