Major United States tech companies, including Amazon, Microsoft, and Meta, are urging President Joe Biden to reconsider a proposed regulation that would impose sweeping restrictions on global AI chip exports.
Under the umbrella of the Information Technology Industry Council, these companies have raised alarms about the potential impact of the new rule, warning that it could undermine U.S. leadership in the rapidly growing artificial intelligence sector.
The regulation, which could be finalized as early as Friday, is part of the U.S. government’s efforts to limit adversaries, particularly China, from using advanced AI technologies. The proposed rule would restrict the sale of AI chips to several countries, including China, with the aim of preventing these technologies from bolstering China’s military capabilities.
The U.S. Commerce Department’s proposed restrictions target China, seeking to limit its access to crucial AI technologies that could enhance its military strength. However, industry stakeholders argue that the rule could have unintended consequences, potentially ceding the global AI market to international competitors.
In a letter to U.S. Commerce Secretary Gina Raimondo, ITI CEO Jason Oxman expressed concern about the rush to finalize the rule during the final days of President Biden’s term, just weeks before the inauguration of President-elect Donald Trump on January 20. Oxman warned that rushing such a significant and complex rule could have serious negative repercussions.
“Rushing a consequential and complex rule to completion could have significant adverse consequences,” Oxman stated in a January 7 letter obtained by Reuters.
Although the industry acknowledges the importance of national security, Oxman emphasized the potential risks to U.S. leadership in AI. He called on the administration to take a more measured approach, urging that the rule be issued as a proposed rulemaking to allow for more extensive consultation and deliberation with stakeholders.
The Semiconductor Industry Association also voiced concerns about the proposed regulation, issuing a statement on Monday. Similarly, Oracle’s Executive Vice President, Ken Glueck, criticized the rule in a blog post, describing it as “the Mother of All Regulations” that would affect nearly all global cloud computing operations.
According to Reuters, neither the U.S. Commerce Department nor the White House has responded to requests for comment, leaving the tech industry anxious about the economic and geopolitical ramifications of the proposed restrictions.
The proposed rule comes as Microsoft intensifies its push to maintain U.S. leadership in AI technology, especially in the face of growing competition from China. In a January 3 blog post, Microsoft’s Vice Chairman and President, Brad Smith, announced the company’s plan to invest $80 billion in AI-enabled data centers this year, underscoring the importance of reducing China’s dominance in the global AI race.
Smith compared the current AI competition to the evolution of the telecommunications industry, noting that Chinese companies, backed by substantial government subsidies, overtook Western counterparts in telecommunications over the past two decades.
He warned that China is now replicating this strategy in AI, subsidizing access to critical technologies like chips and building local AI data centers in developing nations. This strategy aims to secure long-term dominance in the global AI ecosystem, creating dependencies that could pose challenges to U.S. national security.
