The Biden administration's new regulations aimed at more strictly controlling exports of semiconductors for artificial intelligence (AI) have faced public backlash from major U.S. corporations.
According to the New York Times (NYT) and Wall Street Journal (WSJ) on the 9th, U.S. corporations are opposing the export controls, claiming that business growth could slow and that compliance with the new regulations would incur significant expenses. They are also raising questions about whether President Biden, who is set to leave office soon, should make such regulatory decisions that have major economic implications. The Biden administration is expected to announce new semiconductor export controls as early as the 10th.
The new regulations announced by the Biden administration classify countries around the world into three categories: allies, adversaries, and others, allowing only a small number of allied countries, including South Korea, Japan, Taiwan, and major Western nations, to import U.S.-made AI semiconductors without restrictions. The importation from over 20 adversarial countries, including China and Russia, is effectively banned, while it is reported that a cap on semiconductor purchase volumes will be set for more than 100 other countries.
The Biden administration holds the position that AI can significantly impact national security, including changing the dynamics of future warfare, and that only trusted nations should be allowed to develop AI. While the administration has already imposed several export controls on countries like China and Russia, it aims to prevent China from importing semiconductors through other nations.
In particular, there are concerns that if AI data centers are established in Southeast Asia and Middle Eastern countries that are not U.S. allies, China could acquire AI technology through those countries' data centers. The NYT explained that there is also intention to ensure that AI data centers are built in the U.S. as much as possible from an economic standpoint.
However, corporations argue that they are strongly opposed to the regulations, as they could suffer significant impacts on revenue and lose technological dominance. Corporations assert that countries unable to import U.S.-made semiconductors will ultimately resort to importing related technologies, such as AI semiconductors, from China, which could lead to the growth of China's AI industry and allow it to catch up to the U.S.
According to the NYT, corporations like Nvidia, which dominates 90% of the AI semiconductor market, as well as Microsoft (MS) and Oracle, are concerned about potential impacts on international sales and have met with congressional and White House officials to oppose the regulations. Ken Glueck, Oracle's vice president, criticized the regulations on his blog, stating that they would be recorded as "the most destructive regulations ever imposed on the American tech industry."
Major corporations are also appealing to the incoming Trump administration, which is set to launch on the 20th. Although President-elect Trump recently expressed support for building data centers within the U.S., it remains uncertain how he will handle the export regulations once he takes office, according to the NYT.