China Rebukes Biden Administration for New AI Export Controls

TMTPOST -- China rebukes the Biden administration for the new wave of export controls on artificial intelligence (AI) chips.

Credit：Xinhua News Agency

China firmly opposes the Biden administration's announcement of restrictions on exports related to AI, a spokesperson with the Ministry of Commerce of China (MOFCOM), responded to a question about the new U.S. export controls on Monday, according to the ministry’s website.

China was aware of the release of the U.S. export restrictions regarding AI, which further tighten export controls on AI chips, AI model parameters etc., expand the so-called long-arm jurisdiction, namely an arbitrary judicial practice, and create obstacles and interference for third parties engaged in normal trade with China, the spokesperson said.

The spokesperson noted the signs of potential further restrictions have even slammed by American companies. Previously, high-tech companies and industry organizations from the United States expressed their dissatisfaction and concern through various channels, and have strongly urged the Biden administration to halt their implementation as they argued that the restrictive measures had been formulated hastily without sufficient discussion and constitute the excessive regulation of the AI sector, and will lead lead to significant adverse consequences, the spokesperson said.

However, the Biden administration has ignored the industry’s reasonable appeals, and consisted on the hasty implementation of these measures., according to the spokesperson. Such move exemplifies the generalization of the concept of national security and the abuse of export controls, marking a blatant violation of international multilateral trade rules, the spokesperson criticized.

The Biden administration’s abuse of export restrictions seriously has hindered normal trade between countries, undermined market rules and international economic order, affected global technological innovation, and damaged the interests of businesses worldwide, including those in the United States, the spokesperson said. China will take necessary measures to strongy safeguard its legitimate rights and interests, the spokesperson warned.

Earlier Monday, the White Hose announced releasing an Interim Final Rule on Artificial Intelligence Diffusion to ensure “U.S. technology undergirds global AI use and that adversaries cannot easily abuse advanced AI.” The new rule, which builds on previous chip controls by thwarting smuggling, closing other loopholes, and raising AI security standards, streamlines licensing hurdles for both large and small chip orders, bolsters U.S. AI leadership, and provides clarity to allied and partner nations about how they can benefit from AI, the White House said in a fact sheet.

The Biden administration had already limited semiconductor exports to China, and the new regulations represent an expansion of semiconductor caps to most of the world as it will create three tiers of chip trade restrictions. The regulatory framework for Responsible Diffusion of Advanced Artificial Intelligence Technology adopts a three-tired strategy to ensure U.S. allies have access to the most advanced AI models, and Keep such models out of the hands of adversaries, according to the Department of Commerce’s Bureau of Industry and Security (BIS).

A small number of U.S. allies, about 18 countries, at the top level, would enjoy New License Exception Artificial Intelligence Authorization (AIA) and maintain essentially unmitigated access to American chips. A group of alleged adversaries like China would be effectively blocked from importing the chips. Some 120 other countries, the vast majority of the world have to be reportedly subject to limits on the total computing power that can go to one country.

The new updated Dace Center Validated End User (VEU) program, further bifurcating Data Center VEUs into Universal VEUs (UVEU), National VEUs (NEVU). Under the UVEU, U.S. and certain allied and partner country entities will have the opportunity to obtain a single authorization that will allow the company to build data centers around the world without additional authorizations, except in arms-embargoed countries. NVEU provides headquartered outside arms-embargoed countries the opportunity to obtain an authorization that will allow the company to build data centers in specified locations without additional authorizations, except in arms-embargoed countries.

Authorized NVEUs will be able to build data centers up to a specified scale in each country. U.S.-headquartered UVEUs such as Microsoft will be able to to keep as much as 50% of their controlled advanced chips outside the United States, and up to 25% of these controlled chips outside of the top tier countries, namely certain U.S. allied and partner countries, no more than 7% in any single country under other two tiers.

The new rule also institutes new controls on the model weights of the most advanced closed-weight AI models. These controls will initially apply to the weights of models trained with 10^26 computational operations or more, and authorizations will be required to export, reexport, or transfer (in-country) such weights to a broad set of countries. Additionally, the rule creates a new foreign direct product rule that applies these controls to certain model weights produced abroad using advanced computing chips made with U.S. technology or equipment.

The new rule is set to take effect following a 120-day comment period, so the incoming Trump administration could weigh and determine the rules for the sales of advanced chips by chip giants including Nvidia Corporation.

Nvidia called the upcoming new rule “misguided ” and blasted the Biden administration for seeking to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review. “This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally,” said Ned Finkle, Nvidia's vice president of government affairs.