For representative purposes. |Photo courtesy: Getty Images
What happened so far: Aiming to tighten control over the distribution of artificial intelligence (AI) chips and technology, the U.S. Bureau of Industry and Security (BIS) has introduced a tiered framework for licensing and exports. It argued that the restrictions are consistent with “national security and foreign policy interests.” Furthermore, it will help “foster a safe and reliable technology ecosystem for the responsible use and dissemination of AI.”
What technology are we discussing?
Broadly speaking, this regulation concerns the weight of advanced computing chips and certain closed AI models. An AI model is a software program that consists of a series of mathematical operations. When data is input into a program, these operations are performed on the input data (provided by the user) and produce output, such as information, analysis, or media. It is the design of these operations and their arrangement, known as the model architecture, that determines the nature and quality of the output.
What does the regulation propose?
The new regulations update existing rules on exports, reexports and transfers (in-country) by dividing countries into three tiers, each with different rules regarding licensing and authorization. The first of these phases will have no restrictions on the export, reexport, or transfer of advanced computing chips to 18 U.S. allies and partners, including Australia, Belgium, Canada, South Korea, the United Kingdom, Japan, and others. Tier 2 introduces mandatory authorizations and licenses, as well as volume caps and exemptions based on specifications. Transactions that could contribute to the development of advanced AI models will likely require verified end user (VEU) approval. No authorization is required for anything that does not contribute to the development of advanced AI models, such as chips with the collective computing power of approximately 1,700 advanced GPUs. China and India are classified together under this subheading. The third tier includes countries embargoed with arms such as North Korea, Iraq, Iran, and Russia. These countries will no longer have access to the technology.
Why was access restricted?
One of the main objectives was to prevent technology (or equipment) from reaching “countries of concern” or adversaries of the United States. Additionally, as detailed in the Federal Register, model weights are stored outside the United States “only under strict security conditions,” and the advanced integrated circuits (ICs) required to train those models are We strive to ensure that large clusters are “embedded in the destination.” Items with relatively low risk of diversion or misuse. ” BIS has determined that adversaries may leverage advanced AI systems to improve the speed and accuracy of military decision-making, planning, and logistics. BIS also notes that access to the system could potentially lower barriers for non-experts to develop weapons of mass destruction, support offensive cyber operations, and abet human rights abuses (such as through mass surveillance). I observed that there is. Separately, it is important to note that BIS has expressed concern that Chinese companies are using “uncontrolled foreign subsidiaries in various destinations” to purchase ICs. .
What are your concerns?
The biggest concerns relate to threats to US global competitiveness in this area. Ned Finkle, vice president of government affairs at NVIDIA, the world’s largest chipmaker, wrote in a blog post that it would undermine the innovation that has kept the United States ahead. Finkle argued that the rule does nothing to strengthen U.S. security. “The new rules will govern technology around the world, including technology already widely used in mainstream gaming PCs and consumer hardware.”
Oracle executive vice president Ken Glueck wrote in December 2024 that the rules assume there are no other non-U.S. suppliers sourcing GPU technology. Explaining the competitive aspect, an Oracle executive said, “By adding more chips to the problem, we can keep playing the game.” “If an alternative supplier’s performance is poor, you can achieve comparable performance by simply adding more GPUs for that task. Huawei and Tencent come in. Do it for less. Enter the Communist Party of China. . And let’s roll it out globally and get into Alibaba,” he explained. The rules were introduced less than a week before President-elect Donald Trump returns to the White House. The tech industry is hopeful that the next administration will reverse the framework.
Do these rules affect India?
Large data centers in India that want to deploy advanced AI chips will need to apply for VEU approval to speed up their work, according to Pranay Kotasthane, chair of the high-tech geopolitics program at Takshashila Institute. There may be. He said Indian companies with VEU clearance can use exported items for civil and military purposes, except for nuclear end-uses. “Overall, it doesn’t seem like a big deal. The bigger story is that India, perhaps because of the chip leak to Russia, is not in the category of a reliable ally or partner.” said.
issued – January 23, 2025 8:30am IST
