Outgoing US President Biden has moved ahead with some much-criticized export restrictions for AI chips.
Released today (January 13), the Interim Final Rule on Artificial Intelligence Diffusion restricts the access of AI chips and AI model weights to countries not on the US government’s allies and partners list.
The allies and partners list consists of 18 countries: Australia, Belgium, Britain, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, South Korea, Spain, Sweden and Taiwan, plus the United States.
Companies operating in countries not on the list but not subject to ongoing trade restrictions with the US will be able to buy up to 1,700 advanced AI chips without permission, with anything more than that requiring a special license.
According to a statement from the White House, entities headquartered in countries on the close allies and partners list that meet “high security and trust standards” can obtain Universal Verified End User (UVEU) status, allowing them to place up to seven percent of their global AI computational capacity in countries around the world.
Meanwhile, entities that meet the same security requirements and are headquartered in “any destination that is not a country of concern” can apply for National Verified End User (VEU) status, enabling them to purchase computational power equivalent to up to 320,000 advanced GPUs over the next two years.
The statement went on to note that non-VEU entities located outside of allied countries would still be able to purchase “large amounts of computational power,” up to the equivalent of 50,000 advanced GPUs per country.
Perhaps more significantly, the rule also seeks to restrict embargoed countries from accessing advanced AI models, by setting security standards to protect AI model weights and limiting their transfer to "non-trusted actors." The rules will only impact closed-weight models and not open-weight AI models, such as Meta’s Llama.
The US government has long attempted to restrict advanced AI chips from falling into the hands of sanctioned countries but the AI Diffusion legislation marks the first time an attempt has been made to limit access to AI models.
A “misguided… sweeping overreach” or a necessary security measure?
The rules were first reported in December 2024 and have attracted widespread criticism from across the semiconductor industry which fears it may lead to a sharp decrease in the global sales of AI chips.
In response to the newly published rules, Nvidia's VP of government affairs Ned Finkle penned a blog post in which he called them “misguided” and said the restrictions threaten to “derail innovation and economic growth worldwide.”
“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,” Finkle wrote. “This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems, and even software are designed and marketed globally.”
John Neuffer, CEO and president of the Semiconductor Industry Association (SIA) trade body expressed similar concerns in his own statement, saying that the policy was being “rushed out the door days before a presidential transition and without any meaningful input from industry.”
Neuffer added: “The new rule risks causing unintended and lasting damage to America’s economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors. The stakes are high, and the timing is fraught. We stand ready to work with leaders in Washington to chart a path forward that protects national security while allowing us to do what America does best – compete and win globally.”
By contrast, US Commerce Secretary Gina Raimondo said the rules were necessary to ensure the US continued to be a world leader in AI development and chip design.
"The semiconductors that power [AI] and the model weights are, as we all know, a dual use technology,” Raimondo said ahead of the announcement. “They're used in many commercial applications, but also can be used by our adversaries to run nuclear simulations, develop bio weapons and advance their militaries.”
The new export rules will now enter into a 120-day consultation period and will be left to the incoming Trump administration to decide whether or not to modify and/or implement the legislation.