US Implements New Measures to Close Loopholes in AI Chip Exports to China


Summary: The Biden administration is set to introduce new rules to prevent American chipmakers from selling products to China that bypass existing government restrictions on AI chip exports. The updated rules will block some AI chips that fall just below current technical parameters, while requiring companies to report shipments of others. The move aims to prevent Chinese companies from accessing American AI chips through units located overseas. These measures come as part of the US government’s efforts to restrict the export of advanced chips to China and prevent them from strengthening China’s military capabilities.

The Biden administration is taking action to tighten restrictions on AI chip exports to China by implementing new measures aimed at closing loopholes. The new rules, which are expected to be introduced this week, will strengthen the existing restrictions on shipments of advanced chips and chipmaking equipment to China. The updates aim to prevent American chipmakers from selling products that circumvent the government restrictions. Some AI chips that currently fall just below the technical parameters will be blocked, and companies will be required to report shipments of other AI chips.

The introduction of these new rules is part of the US government’s broader efforts to limit the export of advanced chips to China, with the goal of preventing China from strengthening its military capabilities. The administration has previously stated that the export curbs are designed to keep US chips and equipment from enhancing China’s military capabilities. In addition, the new measures are intended to address concerns about Chinese companies accessing American AI chips through units located overseas.

The restrictions on AI chip exports come amid ongoing efforts to improve US-China relations. Senior members of the Biden administration have held meetings with Chinese counterparts in recent months in an attempt to thaw difficult relations between the two countries. However, the implementation of these new rules may complicate these diplomatic efforts.

While the specific AI chips that will be effectively banned have not been identified, sources suggest that Nvidia’s H800 chip is among those that the administration aims to block. Nvidia, the world’s most valuable chipmaker, previously faced restrictions on shipping two of its most advanced AI chips to Chinese customers. However, the company was able to release new variants specifically for the Chinese market that bypassed the export controls. The US government now plans to introduce guidelines that will restrict certain advanced datacenter AI chips that are currently not captured by the existing parameters.

It is worth noting that the new rules will exempt AI chips meant for consumer products such as laptops. However, companies will have to notify the US Department of Commerce when fulfilling orders for the most powerful consumer chips to ensure that they are not being used in ways that threaten national security. The US will also remove the ‘bandwidth parameter’ used to restrict exports of certain AI data center chips, which will widen the scope of chips covered. Additionally, a ‘performance density’ parameter will be introduced to prevent future workarounds.

The US government plans to require companies to notify the government about semiconductors that slightly fall below the guidelines before shipping them to China. The government will then assess whether these chips pose a national security risk on a case-by-case basis. The updated rules will also close the loophole that allows Chinese companies to access American AI chips through Chinese units located overseas. However, the rules are not expected to include restrictions on access to US cloud computing services or those of US allies. The government aims to seek comments on the risks associated with such access and how they can be addressed.

Tags: US, China, AI chip exports, restrictions, Biden administration, diplomatic efforts, Nvidia