U.S. Proposes New AI Chip Export Framework Amid Controversy

The Biden administration has unveiled a new framework aimed at regulating the export of advanced computer chips critical for artificial intelligence development.

Announced Monday, the proposal seeks to balance national security concerns with economic interests. However, it has sparked backlash from industry leaders and international allies.

“In the wrong hands, powerful AI systems have the potential to exacerbate significant national security risks, including by enabling the development of weapons of mass destruction, supporting powerful offensive cyber operations, and aiding human rights abuses, such as mass surveillance,” the US Commerce Department said on Monday, as reported by the BBC.

Commerce Secretary Gina Raimondo emphasized the importance of preserving U.S. leadership in AI innovation. “As AI becomes more powerful, the risks to our national security become even more intense,” she said, as reported by Aljazeera.

The plan intends to safeguard AI technologies while enabling access for trusted allies. However, its global implications have raised alarm among chipmakers and foreign officials.The Semiconductor Industry Association criticized the proposal, warning it could harm U.S. competitiveness.

“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,” said SIA President John Neuffer, as reported by Aljazeera.

Nvidia, a leading chipmaker, saw its shares drop by 4% following the news, as previously noted by The Register. The company echoed concerns, stating that the restrictions could weaken innovation without improving security, as reported by the BBC.

The framework includes a 120-day comment period, allowing the incoming Trump administration to potentially reshape the policy, says Aljazeera. Jonathan Kewley, a tech legal expert, predicted:  “It is absolutely sure that the Trump administration will wind back a lot of what Biden has put out there,” as reported by the BBC.

Aljazeera reports that the framework grants unrestricted chip access to 20 key allies, including Japan, the UK, and several EU nations, but imposes caps on other countries. Nations such as Mexico, Portugal, and Switzerland could face limits on the chips used for data centers and AI products.

Top European Union officials criticized the restrictions, as it reads on a statement published by European Commission’s tech and security czar Henna Virkkunen and trade chief Maroš Šefčovič-

Aljazeera says that countries subject to restrictions can apply for legal exemptions or government-to-government deals to increase their chip import limits. Despite these provisions, the policy’s potential to disrupt global supply chains remains a concern by those who see these limitations, as reported today by The Register.

Critics argue that the plan could alienate allies and inadvertently benefit competitors like China. Daniel Castro of the Information Technology and Innovation Foundation warned that pressuring nations to choose between the U.S. and China could strengthen China’s position in the AI ecosystem, as reported by the BBC.

Whether the framework will bolster U.S. security or hinder its technological edge will depend on how it navigates the complex intersection of policy, industry, and global diplomacy.