The next big battle over offshoring is unfolding in Washington, and this time it involves artificial intelligence.
In its final weeks in office, the Biden administration is rushing to enact new regulations to ensure the United States and its close allies control how artificial intelligence is developed in the coming years.
The rule sparked a heated battle between technology companies, governments, and government officials.
The regulation, which could take effect as early as Friday, will determine where U.S.-made chips critical to AI can be shipped. These rules will help decide where to build data centers that create AI, favoring the United States and its allies.
The rules would leave most European countries, Japan and other close U.S. allies free to buy AI chips, while blocking 20 adversaries such as China and Russia from buying them. That will happen. More than 100 other countries will face different quotas on the amount of AI chips they can receive from US companies.
The regulation would also make it easier to send AI chips to trusted U.S. companies like Google and Microsoft that operate data centers, rather than to foreign competitors. The rule would establish security procedures that data centers must follow to protect AI systems from cyber theft.
The Biden administration's plan has drawn swift opposition from U.S. tech companies, who say global regulations could slow their businesses and create costly compliance requirements. These companies also question whether President Biden should enact rules with such far-reaching economic consequences in his final days in office.
Although some details remain unclear, the new rules could force tech companies that spend tens of billions of dollars building data centers around the world to reconsider some of those locations. .
Artificial intelligence, which can answer questions, write code, and create images, is expected to revolutionize the way countries fight wars, develop medicines, and make scientific advances. Because of its potential power, U.S. officials say the AI system could be used by the U.S., rather than by countries that can share its technology with China or act in other countries, or have more say over how the system operates. hopes to be built on allies with in a manner inconsistent with the national security of the United States.
Peter Harrell, a former White House economic official and Carnegie Endowment for International Peace fellow, said the United States currently has a significant advantage in AI and has the ability to influence which countries benefit from it. He said there was.
“It's important to think about how we want to roll out these innovative developments around the world,” he said.
This regulation primarily concerns national security. Given the potential for AI to transform military conflict, this rule would keep the most powerful technology in the hands of allies and prevent China from circumventing U.S. restrictions by accessing AI chips through international data centers. It is designed to. .
But U.S. officials say data centers are also an important source of new economic activity for American society. They want to encourage companies to build as many data centers as possible in the United States, rather than in regions such as the Middle East, where they are funding the attraction of high-tech companies.
Some unions have expressed support for the Biden administration's plan. That's because data centers consume large amounts of electricity and steel. Each creates jobs for construction companies, electricians, HVAC technicians, and even energy production workers.
“The Labor Party has a tremendous interest in the future of AI and technology, not just in its applications but also in the infrastructure that supports it,” said Michael R. Wessel, a United Steelworkers general counsel.
But U.S. tech companies and their supporters say the rules will stifle technology development, strain international alliances, harm U.S. companies and leave countries rushing to develop their own AI chips to replace China's technology. It is argued that this could be an incentive to purchase.
“The risk is that in the long run countries will say, 'We can't rely on the US, we can't import advanced technology from the US, because there's always the threat that the US government will do this.' “Take that away from us,'' said Jeffrey Gertz, senior fellow at the Center for a New American Security.
California-based Nvidia, which controls 90% of the AI chip market, has lobbied against the rule in meetings with Congress and the White House, as have companies such as Microsoft and Oracle. They are concerned that the rule could have a negative impact on international sales.
Ned Finkle, Nvidia's vice president of global affairs, said in a statement that the policy would harm data centers around the world and “push the world toward alternative technologies” without improving national security. .
“We encourage President Biden not to take advantage of President-elect Trump by enacting policies that will only harm the American economy, set us back, and play into the hands of our enemies,” Finkle said. added.
Tech companies are also trying to soften the impact by appealing to President-elect Donald J. Trump, who can decide whether to keep the rules in place or enforce them, tech executives and people familiar with the exchanges said.
Microsoft and Oracle declined to comment.
It's unclear what Mr. Trump will do about the issue, but he has recently expressed support for building data centers in the United States. His advisers include China skeptics who are likely to support tougher restrictions. Others, including the president's son-in-law Jared Kushner, have business ties to Middle Eastern countries that are likely to oppose any restrictions.
The new rules build on export controls introduced by the Biden administration in recent years, banning shipments of advanced AI chips to China and other adversaries and requiring special permits to send AI chips to countries in the Middle East and Southeast Asia. It requires.
These regulations have allowed the United States to exert global influence. G42, the UAE's leading AI company, pledged last year to abandon its use of technology made by Chinese telecom company Huawei, which is under U.S. sanctions, in order to gain access to Nvidia chips.
But the United States is increasingly concerned that Chinese companies are acquiring critical technology through chip smuggling and remote access to data centers in other countries.
Companies also face long wait times to obtain licenses for even small numbers of chips, and foreign officials are appealing directly to the Biden administration to try to get them. So last year, authorities began working to develop a more transparent distribution system.
Tech companies say the requirements are too onerous, making data centers too expensive for some countries and potentially preventing some countries from leveraging AI to benefit health, transportation and hospitality industries. It is claimed that there is. Countries facing caps and other restrictions include traditional U.S. allies such as Israel, Mexico and NATO member Poland.
“The use of these workloads and AI technologies, and the GPUs they rely on, are national security concerns,” Ken Glueck, Oracle's executive vice president, said in a company blog post referring to graphics processing units (AI chips). “We can all agree that this does not constitute a security concern.” .
Nvidia and other technology companies also argue that the rules could backfire by driving buyers from places like the Middle East and Southeast Asia to Chinese companies like Huawei.
Some U.S. officials are trying to counter this narrative. One analysis compiled by U.S. officials that included consultation with private industry argued that Chinese chipmakers face major hurdles and will not be able to export enough chips to train cutting-edge AI models. This analysis was viewed by The New York Times.
“Huawei is having a hard time manufacturing chips sophisticated enough to train AI models in China, let alone exporting them,'' said former Trump deputy national security adviser and China expert. said Matt Pottinger, chief executive officer of the company Garnaut Global. .
