Nvidia slams Biden’s parting AI tech sanctions plan

• In his final days as US President, Joe Biden is targeting China and Russia with an additional set of restrictions on advanced chip exports
• The aim is to keep advanced chips for AI out of the hands of the US’s adversaries by blocking backdoor channels through third-party countries
• The move looks, in part, to be something of a poison pill for President-elect Donald Trump
• Nvidia has slammed the move, calling it “misguided” and saying it will “weaken America’s global competitiveness”

AI chip giant Nvidia has reacted to a planned extension of technology sanctions by outgoing US President Joe Biden’s administration by publishing a blog that criticises the move as a “misguided” act that will “undermine America’s leadership” and potentially “squander America’s hard-won technological advantage”.

The outburst from Nvidia’s VP of government affairs, Ned Finkle, follows news that Biden’s team is set to target multiple nations, in particular China and Russia, with an additional set of restrictions on advanced chip exports just days before Biden hands over the presidency to Donald Trump. The main perceived aim is to keep cutting-edge semiconductor technology out of the hands of countries deemed by the US to be a security risk by blocking supply channels through third-party countries. 

To achieve that aim, the Biden administration is formulating a complex framework under which access to AI chips will be capped for each country according to pre-set criteria. The latest version of the Export Control Framework for Artificial Intelligence Diffusion, under which the restrictions operate, will, the Wall Street Journal has reported, create a global licensing system that will restrict the number of powerful graphics processing units (GPUs) US firms are allowed to export.

Foreign countries are to be grouped into tiers with differing sales limits based on their cumulative computing power and ranked according to how sympathetic they are deemed to be to US policies and principles.

In the top tier are close allies such as Japan, Canada, Australia, the UK and much of western Europe, which have unrestricted access. 

The most restricted (Tier 3) countries – China, Russia, and their close allies – are, of course, totally barred from importing the advanced semiconductors. There is a sense that by imposing these new restrictions just before his successor takes over the presidency, Biden is leaving a poisoned pill, as should Trump subsequently  soften or reverse the restrictions once in office, his sympathies towards Russia in particular would be laid bare.

However, most of the world is in Tier 2, including even the likes of Switzerland, Portugal, Mexico and much of central Europe. At the time of writing, there was no definitive document laying out the administration’s plans but, according to Bloomberg, whose reporters claim to have spoken with those in the know, a kind of probationary status is to be conferred on Tier 2 countries, with individual  limits on the total computing power they are able to import. These Tier 2 countries would be able to ‘earn’ higher computing caps by agreeing to a set of US government security requirements and human rights.

Quite what politicians in Tier 2 countries think of the plan is not yet clear, bearing in mind that no official announcement has been made. 

But there’s no doubt about the mood at Nvidia which, as the world’s leading GPU company, has for the past couple of years been selling its products all over the world as quickly as they can be made, resulting in Nvidia becoming the most valuable listed company on the planet.

Before publishing his blog, Finkle had already commented to Reuters that Nvidia was encouraging Biden to “not preempt incoming President Trump by enacting a policy that will only harm the US economy, set America back, and play into the hands of US adversaries,” but then he went much further in his broader analysis of the situation. 

“The first Trump administration laid the foundation for America’s current strength and success in AI, fostering an environment where US industry could compete and win on merit without compromising national security,” noted Finkle in his blog. “As a result, mainstream AI has become an integral part of every new application, driving economic growth, promoting US interests and ensuring American leadership in cutting-edge technology… That global progress is now in jeopardy. The Biden administration now seeks to restrict access to mainstream computing applications with its unprecedented and misguided “AI Diffusion” rule, which threatens to derail innovation and economic growth worldwide.”

He continued: “In its last days in office, the Biden administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review. This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally. And by attempting to rig market outcomes and stifle competition – the lifeblood of innovation – the Biden administration’s new rule threatens to squander America’s hard-won technological advantage.

“While cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance US security. The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware. Rather than mitigate any threat, the new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the US ahead… As the first Trump administration demonstrated, America wins through innovation, competition and by sharing our technologies with the world – not by retreating behind a wall of government overreach. We look forward to a return to policies that strengthen American leadership, bolster our economy and preserve our competitive edge in AI and beyond,” concluded Finkle.

Nvidia is not alone: Multiple US companies have already come out strongly against the new controls as far too strict and hitting all manner of mainstream AI applications, not just the sensitive advanced AI use cases.

As a result, the restrictions look likely to impact countries that are nominally US allies but which fear they will be under suspicion as possible sanction-busting intermediaries because they maintain and value trade ties with China.  While many will be happy to toe the US line rather than risk having their access to US tech proscribed, the overreaching nature of the proposals is bound to annoy many, especially in South-east Asia where governments are hell-bent on pursuing rapid digital transformation and will want elbow room to hook up with partners – such as Chinese companies – that can help them get there.

– Ian Scales, Contributing Editor, TelecomTV