American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Biden set to tighten Nvidia AI chip exports to maintain US AI dominance

by admin January 9, 2025
January 9, 2025
Biden set to tighten Nvidia AI chip exports to maintain US AI dominance

The Biden administration is preparing a final round of export restrictions on advanced artificial intelligence (AI) chips, marking a last-minute effort to limit China and Russia’s access to cutting-edge technologies, as per a Bloomberg report.

The proposed measures aim to consolidate US leadership in AI development and ensure global compliance with American security and human rights standards.

America’s bid to control AI Chips

The report said citing sources that the new rules will introduce a three-tier system for regulating the export of AI chips, which are crucial for data center operations and advanced computational tasks:

  1. Tier 1 Countries: This group includes the US and 18 key allies, such as Germany, Japan, South Korea, and Taiwan.

    Companies headquartered in these countries will face minimal restrictions and can apply for blanket US government permissions to ship chips worldwide.

    To qualify, firms must adhere to strict conditions, such as keeping at least 75% of their computing power within Tier 1 nations and limiting operations outside these countries.

    US-based companies must also maintain at least half of their computing power domestically to secure this status.

  2. Tier 2 Countries: The majority of countries fall into this category.

    For these nations, the US will impose limits on the total number of AI chips that can be imported, equivalent to about 50,000 graphic processing units (GPUs) over three years from 2025 to 2027.

    However, companies can bypass national limits and gain higher import caps by achieving “validated end-user” (VEU) status.

    To qualify, firms must demonstrate a credible track record of meeting US government cybersecurity, physical security, and human rights compliance standards.

  3. Tier 3 Countries: This group includes China, Macau, and nations under U.S. arms embargoes, such as Russia.

    These countries will face the strictest restrictions, with shipments of advanced AI chips to their data centers being broadly prohibited.

The overarching goal of these tiers is to ensure that US and allied nations retain superior computing power compared to the rest of the world.

Nvidia opposed to the idea

The proposed measures have already sparked criticism from the semiconductor industry.

Nvidia, the world’s leading AI chipmaker, warned that the restrictions could harm economic growth and U.S. technological leadership.

“A last-minute rule restricting exports to most of the world would not reduce the risk of misuse but would threaten economic growth and US leadership,” the company stated.

The Semiconductor Industry Association also expressed concerns, urging the administration to avoid rushing such a significant policy change during a presidential transition.

The group emphasized the need for a deliberative process to ensure the U.S. maintains its global competitiveness in semiconductor manufacturing and AI technology.

AI software under control

The new rules also extend beyond hardware to include software, particularly closed AI model weights—numerical parameters used in AI models for decision-making.

The proposed regulations will prohibit hosting these model weights in Tier 3 countries and impose security requirements for Tier 2 nations.

Open weight models, which allow public access to underlying code, are exempt from these rules.

However, companies seeking to fine-tune open models for specific applications in Tier 2 nations will need US government approval if the process involves significant computational resources.

US wants AI leadership

The Biden administration views these measures as critical to maintaining US dominance in AI development.

By controlling the flow of advanced chips and establishing strict export rules, the US aims to ensure that its allies have access to superior computing power while curbing the technological advancement of adversaries.

Lawmakers have also highlighted the strategic importance of these actions.

In a letter to Commerce Secretary Gina Raimondo, bipartisan members of Congress emphasised the need to leverage US AI technology to “pry both companies and countries out of Beijing’s orbit.”

Implications for global markets

If implemented, the restrictions will reshape the global semiconductor landscape.

While Tier 1 countries stand to benefit from uninterrupted access to US chips, Tier 2 nations will need to comply with stringent standards to avoid falling behind in AI development.

Tier 3 nations, particularly China, face significant setbacks in their ambitions for technological advancement.

Shares of Nvidia and AMD, two major players in AI chip manufacturing, dipped slightly following reports of the impending restrictions, reflecting the industry’s unease over the potential impact of these sweeping measures.

The post Biden set to tighten Nvidia AI chip exports to maintain US AI dominance appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Asian stocks wobbly on Thursday: Nikkei down 1%, Hang Seng flat
next post
Apple Pay down: users report Apple Cash issues disrupting payments across platforms

Related Posts

T-Mobile to acquire most of U.S. Cellular in...

May 31, 2024

What made Oklo stock soar 20% on Friday?

May 24, 2025

Japan reports record $63B US trade surplus amid...

April 17, 2025

Constellium CEO warns 50% aluminum tariff hike could...

June 3, 2025

Women’s college basketball championship expected to set new...

April 10, 2024

Trump, jobs, and the Fed: navigating a pivotal...

December 31, 2024

AppLovin stock has surged: brace for mean reversion...

December 10, 2024

Shell Q1 profit falls 28% but tops analyst...

May 2, 2025

Here’s why Qantas share price has surged to...

December 12, 2024

Congress approved a TikTok ban. Why it could...

April 27, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved