The Biden administration has announced the introduction of additional restrictions on the sale of modern semiconductors to Chinese companies in an effort to curtail China’s progress in supercomputers and artificial intelligence. These new rules, which strengthen restrictions introduced in October 2022, aim to prevent most deliveries of advanced chips from the United States to Chinese data centers that utilize them for AI models.
American companies wishing to sell advanced chips or equipment for their production in China will now be required to notify the government or obtain a special license. This measure aims to prevent the risk of exporting American microcircuits to China through third countries. Furthermore, chip manufacturers will also need to receive authorization from ten other countries under US embargo in order to supply microcircuits to the United States.
The Biden administration argues that China’s access to advanced technologies is a cause for concern due to its potential military applications, such as managing hypersonic missiles, creating advanced surveillance systems, or hacking US systems for classified information.
However, stricter restrictions may also have an impact on Chinese companies such as Bytedance (the parent company of TikTok) and Baidu, as artificial intelligence has valuable commercial applications. In the long term, these restrictions could weaken the Chinese economy, particularly in sectors like retail and healthcare that are being transformed by AI. Additionally, sales of NVIDIA, AMD, and Intel chips in China may be affected, as some microchip manufacturers generate up to 30% of their income from Chinese buyers.
US officials have clarified that the new rules will not apply to microcircuits intended exclusively for commercial purposes, including smartphones, laptops, electric cars, and gaming systems.
While these new restrictions may cause frustration among Chinese politicians, they could also spur China’s efforts to develop alternative technologies, ultimately weakening the global influence of the United States.