As the Biden administration has added export restrictions on artificial intelligence (AI) semiconductors with a week left in its term, Nvidia, which has a high proportion of overseas exports, has strongly criticized this move. While downplaying the Biden administration's policy as harmful to national interests, it has requested a reconsideration while boosting the next Trump administration. However, expectations remain that the Trump administration would continue these regulations, making it inevitable for Nvidia and the U.S. semiconductor industry to suffer.
◇ U.S. semiconductor industry strongly protests export crisis... 'We only trust Trump'
Ned Pinkle, vice president of Nvidia's global partnerships, said in a statement on the 13th (local time): "The Biden administration is secretly drafting regulations exceeding 200 pages at the end of its term, thereby undermining U.S. leadership," and added, "While this restriction claims to be an 'anti-China' measure, it will actually lead to a loss of the hard-won technological advantage rather than enhancing security." He also argued that the Biden administration is trying to control technologies widely used in mainstream gaming PCs and consumer hardware without appropriate legislative review.
The core of the measure announced by the U.S. Department of Commerce on that day is to block exports of high-performance AI models to 22 countries classified as 'adversarial states' such as China and Russia. The intent is to prevent access to closed AI models from companies like OpenAI, the developer of ChatGPT, in these countries. Additionally, the U.S. will sell its AI semiconductors without restrictions only to 18 allied countries such as South Korea, setting sales limits for most other countries. This aims to prevent China from developing AI through data centers established in third countries in Southeast Asia and the Middle East or circumventing imports of U.S.-made AI semiconductors. Countries excluding allies can only purchase U.S. graphics processing units (GPUs) within a limited quota of 50,000 units.
American corporations, which have supplied AI models and chips worldwide, are facing a crisis of reduced market access. Currently, Nvidia earns about 56% of its sales from regions outside the U.S. For this reason, Nvidia is reaching out for help to the Trump administration. Pinkle mentioned, "The Trump administration created an environment where U.S. industry can compete and achieve results while safeguarding national security, and as a result, mainstream AI has established itself as an essential element of applications, enhancing U.S. interests," and he appealed, "As shown by the first Trump administration, I hope we can return to policies that maintain a competitive edge in advanced technology through innovation rather than government over-intervention."
◇ As China presents 'world-class' AI models, U.S. is in a predicament
Concerns that China's AI development is progressing faster than expected influenced the Biden administration's push for AI chip export restrictions at the end of its term. On the 26th of last month, Chinese AI company DeepMind released AI models that surpass U.S. open-source language models, including Meta's LLaMA series. Despite the enhanced semiconductor sanctions against China, the emergence of world-class AI models led to a consensus in U.S. politics that stronger measures are necessary.
The U.S. semiconductor industry and some academics have consistently opposed additional sanctions against China. This is due to concerns that American corporations may lose market share to foreign competitors because of these regulations. Some researchers have also analyzed that China is developing AI models using low-cost training methods without cutting-edge AI chips.
U.S. corporations are pinning their hopes on the Trump administration, but there is a prevailing opinion that easing sanctions against China will not be easy. If the Trump administration does not revoke this measure, the new regulations will take effect 120 days later. Greg Allen, director of the AI Advanced Technology Center at the Center for Strategic and International Studies (CSIS), stated, "This measure could be a very important move that significantly restricts the expansion of China's AI ecosystem," and he added, "As the U.S. stands at a crucial crossroads in the AI technology competition with China, it is likely that the Trump administration will find this policy attractive."