US tech giants urge Biden to rethink AI chip regulation

• Published On: 09 January 2025 at 20:40

Major US technology companies, including Amazon, Microsoft, and Meta, have urged President Joe Biden to reconsider a proposed regulation that would impose broad restrictions on global AI chip exports.

These companies, which are part of the Information Technology Industry Council, have expressed concern about the new rule's potential impact, warning that it could undermine the United States' leadership in the rapidly growing artificial intelligence sector.

The regulation, which could be finalised as soon as Friday, is part of the US government's efforts to prevent adversaries, particularly China, from deploying advanced AI technologies. The proposed rule would restrict the sale of AI chips to several countries, including China, with the goal of preventing these technologies from enhancing China's military capabilities.

The proposed restrictions by the US Commerce Department aim to limit China's access to critical AI technologies that could boost its military strength. However, industry stakeholders argue that the rule may have unintended consequences, potentially handing over the global AI market to international competitors.

In a letter to US Commerce Secretary Gina Raimondo, ITI CEO Jason Oxman expressed concern about the rush to finalise the rule during President Biden's final days in office, just weeks before President-elect Donald Trump's inauguration on January 20. Oxman cautioned that hastening such a significant and complex rule could have serious negative consequences.

"Rushing a consequential and complex rule to completion could have significant adverse consequences," Oxman wrote in a January 7 letter obtained by Reuters.

Although the industry recognises the importance of national security, Oxman highlighted the potential risks to the United States' leadership in AI. He urged the administration to take a more measured approach, requesting that the rule be issued as a proposed rulemaking to allow for greater consultation and deliberation with stakeholders.

The Semiconductor Industry Association expressed concerns about the proposed regulation in a statement on Monday. Similarly, Oracle's Executive Vice President, Ken Glueck, criticised the rule in a blog post, referring to it as "the Mother of All Regulations" that would impact nearly all global cloud computing operations.

According to Reuters, neither the US Commerce Department nor the White House have responded to requests for comment, leaving the tech industry concerned about the economic and geopolitical implications of the proposed regulations.

The proposed rule comes as Microsoft steps up its efforts to maintain U.S. leadership in AI technology, particularly in the face of increasing competition from China. In a blog post on January 3, Microsoft's Vice Chairman and President, Brad Smith, announced the company's intention to invest $80 billion in AI-enabled data centres this year, emphasising 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, pointing out that Chinese companies, aided by significant government subsidies, have surpassed their Western counterparts in telecommunications over the last two decades.

He warned that China is now replicating this strategy in AI by subsidising access to critical technologies such as chips and establishing local AI data centres in developing countries. This strategy seeks to establish long-term dominance in the global AI ecosystem, potentially jeopardising US national security.