US expands export controls for AI semiconductor chips to China

The United States Department of Commerce’s Bureau of Industry and Security (BIS) released a notice on Oct. 17 expanding the already existing export controls of artificial intelligence (AI) chips to China. 

The BIS wrote that the newly released rules “reinforce” those put in place back in October 2022, with the goal of restricting China’s ability to “both purchase and manufacture certain high-end chips critical for military advantage.”

Under Secretary of Commerce for Industry and Security Alan F. Estevez commented on the new controls sayin

“Export controls are a powerful national security tool, and the updates released today build on our ongoing assessment of the U.S. national security and foreign policy concerns that the PRC’s military-civil fusion and military modernization present.”

One of the updated rules includes a new “performance threshold” on chips that can be exported from the U.S.

Previously, the highest-performing chips of the leading companies, like Nvidia and AMD, were the main targets of the export rules, allowing the companies to still export other models to China such as Nvidia’s A800 and H800.

However, the updated rule will now make it so even the A800 and H800 chips will be embargoed from exports to China. China is one of Nvidia’s largest markets along with Taiwan and the U.S.

The rule also requires the notification of exporting “certain additional chips” just below the performance threshold, after which the government will determine if the transaction can proceed.

Along with the restrictions the U.S. government said it will introducing a new exemption that will permit the export of chips for consumer applications.

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In addition to the new performance threshold, BIS also released a framework through which it intends to prevent circumvention of the rules.

These include establishing a worldwide licensing requirement for the export of controlled chips to any U.S.-embargoed country, creating new red flags to help identify restricted chips, creating a notification requirement for high-end gaming chip exports and requesting public comment on various related topics.

The administration also intends to control exports of manufacturing equipment and materials to make high-end chips.

According to the notice, the rules will be in effect from Nov. 16, 2023, with public comments about the rules having a deadline of 60 days thereafter.

This update to the export conditions comes as Chinese tech company Baidu announced the release of version 4.0 of its AI chatbot Ernie, which it claims to be on par with OpenAI’s ChatGPT.

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