Tech giant Nvidia is pushing back on a new executive order by the Biden administration that seeks to prevent artificial intelligence (AI) technologies developed in the U.S. from falling into the hands of adversarial countries.
The White House announced the new AI rule on Monday, which seeks to encourage the “diffusion” of U.S.-made AI technologies to allied countries while also putting in place restrictions on the sale of advanced chips to foreign countries that could pose a national security risk.
“This policy will help build a trusted technology ecosystem around the world and allow us to protect against national security risks associated with AI, while ensuring controls do not stifle innovation or U.S. technological leadership,” said Commerce Secretary Gina Raimondo. “Managing these very real national security risks requires taking into account the evolution of AI technology, the capabilities of our adversaries, and the desire of our allies to share in the benefits of this technology.”
Ned Finkle, vice president of government affairs at Nvidia, wrote in a post on the company website that the Biden administration’s action puts in jeopardy global progress in AI and said the “unprecedented and misguided” AI diffusion rule “threatens to derail innovation and economic growth worldwide.”
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“This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems and even software are designed and marketed globally. And by attempting to rig market outcomes and stifle competition – the lifeblood of innovation – the Biden Administration’s new rule threatens to squander America’s hard-won technological advantage,” Finkle wrote.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NVDA | NVIDIA CORP. | 131.76 | -1.47 | -1.10% |
He added that while the rule is “cloaked in the guise of an ‘anti-China’ measure, these rules would do nothing to enhance U.S. security. The new rules would control technology worldwide, including technology that is already widely available in mainstream gaming PCs and consumer hardware.”
“Although the rule is not enforceable for 120 days, it is already undercutting U.S. interests. As the first Trump Administration demonstrated, America wins through innovation, competition and by sharing our technologies with the world – not by retreating behind a wall of government overreach,” Finkle wrote. “We look forward to a return to policies that strengthen American leadership, bolster our economy and preserve our competitive edge in AI and beyond.”
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The Biden administration’s AI diffusion rule creates an exception for exports of advanced AI chips to 18 key U.S. allies and partners that have technology protection regimes and are aligned with America’s national security and foreign policy interests. The exception allows them to carry out seamless large-scale purchases.
Chip orders with a collective computational power of up to roughly 1,700 advanced GPUs don’t require a license and don’t count against national chip caps – with most chip orders falling into this category, according to the White House.
The rule provides a “Universal Verified End User” status for entities that meet security and trust standards and are headquartered in countries that are close U.S. allies, which allows them to put up to 7% of their global AI computational capacity overseas. It also creates a “National Verified End User” designation for entities headquartered anywhere that isn’t a country of concern to access up to 320,000 advanced GPUs over two years.
It also continues to restrict advanced AI chips from going to countries of concern, while still allowing access to general purpose applications and restricting the transfer of AI chips to non-trusted actors.
