The Biden administration’s final major policy move landed this week with a significant impact on global AI, as it unveiled the most comprehensive AI chips export controls to date. This eleventh-hour decision, announced just days before the administration change, divides the world into AI computing haves and have-nots, with China squarely in the crosshairs of the most stringent restrictions imposed on artificial intelligence technology.
“Artificial intelligence is quickly becoming central to security and economic strength,” the White House fact sheet declares, framing the controls as a decisive action “to ensure that US technology undergirds global AI use and that adversaries cannot easily abuse advanced AI.”
The new AI chips export controls split the global technology landscape into three distinct tiers, fundamentally reshaping how nations can access and develop AI capabilities. Access to advanced AI processors remains unrestricted for 18 key allies, so-called tier-one nations, including Japan, Britain, and the Netherlands.
However, the administration has implemented strict AI chips export quotas for other nations, creating a new global AI development hierarchy. The 18 allies possess “robust technology protection regimes and technology ecosystems aligned with the national security and foreign policy interests of the US,” the policy document states.
For other countries, the restrictions impose precise limitations – chip orders maxing out at roughly 1,700 advanced GPUs can proceed without licences, primarily benefiting academic and research institutions.
Impact on global AI development
The reverberations through the AI industry were immediate. Nvidia, whose AI accelerators power many of the world’s most advanced artificial intelligence systems, saw its shares decline 2%. Vice President of Government Affairs Ned Finkle warned that the export curb “threatens to derail innovation and economic growth worldwide.”
The stakes are exceptionally high for Nvidia, which derives 56% of its revenue from international markets. Cloud computing giants face a complex recalibration of their AI infrastructure.
Under the new framework, US-headquartered providers must adopt a precise mathematical approach to their global operations: no more than 50% of their AI computing power can be deployed outside the country, with a maximum of 25% beyond tier-one countries, and just 7% in any single non-tier-one nation.
US-China AI technology battle intensifies
The timing and scope of these AI chip export controls reveal their primary target: China’s rapidly advancing AI capabilities. The White House document explicitly warns about “countries of concern” that “actively employ AI — including US-made AI” in ways that could “undermine US AI leadership.”
With China accounting for 17% of Nvidia’s sales, the commercial impact aligns directly with the administration’s strategic goals. China’s Commerce Ministry’s swift response – promising to “take necessary measures to safeguard its legitimate rights and interests” – signals a new chapter in the technological cold war between the world’s leading AI powers.
The restrictions specifically target China’s ability to develop advanced AI systems, particularly those that could enable “the development of weapons of mass destruction, supporting powerful offensive cyber operations, and aiding human rights abuses.”
Global response and future implications
The US’s European allies have raised concerns about the broad reach of the controls. EU Executive Vice-President Henna Virkkunen and Commissioner Maroš Šefčovič emphasized the need for continued access to advanced AI technology, stating they are “looking forward to engaging constructively with the next US administration” to maintain “a secure transatlantic supply chain on AI technology and supercomputers.”
US National Security Adviser Jake Sullivan frames the controls within a broader technological revolution: “The US has to be prepared for rapid increases in AI’s capability in the coming years, which could have a transformative impact on the economy and our national security.”
Set to take effect in 120 days, the AI chip export controls represent more than just Biden’s final policy move – they establish a new paradigm for global AI development. As former Trump administration national security official Meghan Harris notes, “How effective the rule ends up being in the next 10 to 15 years is now up to the incoming team.”
The regulations mark a defining moment in both US-China relations and global AI development, creating boundaries and alliances that will shape the future of artificial intelligence well beyond the current administration. With these controls, Biden’s final act may be remembered as the moment that redefined the global AI technology landscape.
See also: South Korea wants to develop 50 types of AI chips by 2030
Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including Intelligent Automation Conference, BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.
Explore other upcoming enterprise technology events and webinars powered by TechForge here.
Be the first to comment