In a bold move just before leaving office, President Joe Biden has unveiled a significant set of new export regulations for U.S.-made artificial intelligence (AI) chips. This sweeping initiative aims to clarify how allied nations can access AI technology while placing new limitations on chip sales to various countries.

The administration revealed its Interim Final Rule on AI diffusion on Monday, aiming to enhance understanding among partner nations about the advantages of AI. A press release from the White House emphasized the need to streamline the licensing process for chip orders. However, these guidelines simultaneously impose new restrictions on most countries around the globe, sparking concerns about their potential economic impact.

According to reports by CNN, the proposed export restrictions categorize countries into three distinct groups.

Group One

comprises the U.S.’s closest allies, including Japan and South Korea, which will not face additional limitations.

Group Two

consists of adversarial nations such as China and Russia, which already encounter stringent prohibitions on purchasing advanced AI chips. The new guidelines tighten these restrictions further, particularly on sales of “closed” AI models.

Group Three

encompasses a wider set of countries, including nations like Mexico and Portugal, which will now have caps placed on the number of chips they can procure. Each of these countries will be limited to purchasing 50,000 graphics processing units, although there are mechanisms for obtaining higher quotas through special arrangements.

This last group of nations stands to be most affected by the new rules, as the restrictions are primarily designed to prevent adversaries from circumventing trade barriers by acquiring chips through third-party nations. However, critics argue that these limitations may also hinder the development and adoption of AI technologies in these countries.

Nvidia has responded to the proposed restrictions, characterizing them as “unprecedented and misguided.” The company cautioned that such regulations could “derail” both global innovation and economic growth, raising alarms about the implications for the tech industry and international trade.

These new guidelines are set to build on earlier measures introduced by the Biden administration in October 2022 and earlier this month. Notably, the current proposal includes a 120-day comment period, but industry experts anticipate that the regulations will come into effect before this period concludes.

As the AI community grapples with this news, a new administration is poised to take office shortly, potentially altering the landscape of chip export policies once again. With the conversation surrounding these restrictions evolving rapidly, the future of AI technologies and international collaboration hangs in the balance. Will the Biden administration's legacy be one of collaboration or division in the realm of AI? Stay tuned for developments as we approach a pivotal moment for technology and trade!