The next big fight over offshoring is playing out in Washington, and this time it involves artificial intelligence.
The Biden administration, in its final weeks in office, is rushing to issue new regulations to try to ensure that the United States and its close allies have control over how artificial intelligence is developed in the coming years.
The rules have sparked an intense fight between technology companies and the government, as well as administration officials.
The regulations, which could be issued as soon as Friday, would dictate where U.S.-made chips that are critical to ai could be shipped. Those rules would then help determine where data centers that create ai would be built, with preference for the United States and its allies.
The rules would allow most European countries, Japan and other close US allies to make unrestricted purchases of ai chips, while preventing two dozen adversaries, such as China and Russia, from purchasing them. More than 100 other countries would face different quotas on the number of ai chips they could receive from US companies.
The regulations would also make it easier to ship ai chips to trusted American companies that run data centers, such as Google and Microsoft, than to their foreign competitors. The rules would establish security procedures that data centers would have to follow to keep ai systems safe from cyber theft.
The Biden administration's plan has sparked swift reaction from U.S. tech companies, which say global regulations could slow their businesses and create costly compliance requirements. Those companies also question whether President Biden should set rules with such far-reaching economic consequences in his final days in office.
While some of the details are still unclear, the new rules may force technology companies that are investing tens of billions of dollars in building data centers around the world to rethink some of those locations.
artificial intelligence, which can answer questions, write code and create images, is expected to revolutionize the way countries fight wars, develop medicines and achieve scientific advances. Because of their potential power, U.S. officials want ai systems to be built in the United States or allied countries (where they will have more say over what the systems do) rather than in countries that could share that technology with China or act in other countries. ways contrary to the national security of the United States.
Peter Harrell, a former White House economic official and fellow at the Carnegie Endowment for International Peace, said the United States currently has a substantial advantage in ai and the influence to decide which countries could benefit from it.
“It's important to think about how we want those transformative advances to be implemented around the world,” he said.
The rules are largely about national security: Given how ai could transform military conflicts, the regulations are designed to keep the most powerful technology in the hands of allies and prevent China from gaining access to chips from ai through international data centers.
But U.S. officials say data centers are also important sources of new economic activity for American communities. They want to encourage companies to build as many data centers as possible in the United States rather than in regions like the Middle East, which offer money to attract technology companies.
Some unions have come out in support of the Biden administration's plan. This is because data centers are large consumers of electricity and steel. Each creates jobs for construction companies, electricians and HVAC technicians, as well as workers involved in energy production.
“Unions have a huge interest in the future of ai and technology, not only in terms of its application but also in terms of the infrastructure that supports it,” said Michael R. Wessel, counsel for the United Steelworkers union.
But American technology companies and their supporters argue that the rules could slow technological advances, strain international alliances and encourage countries to buy alternative technologies from China, which is competing to develop its own artificial intelligence chips.
“The risk is that in the long term countries will say, 'We can't depend on the United States, we can't import our advanced technology from the United States, because there is always the threat that the American government is going to take it away from us,'” said Geoffrey Gertz, senior researcher at the Center for a New American Security.
California-based Nvidia, which controls 90 percent of the ai chip market, has lobbied against the rules in meetings with Congress and the White House, as have Microsoft, Oracle and other companies. They worry the rules could hurt international sales.
Ned Finkle, Nvidia's vice president of global affairs, said in a statement that the policy would harm data centers around the world without improving national security and would “push the world toward alternative technologies.”
“We encourage President Biden not to get ahead of incoming President Trump by enacting a policy that will only harm the American economy, set America back, and play into the hands of his adversaries,” Finkle added.
tech companies have also tried to mitigate the impact by appealing to the incoming administration of President-elect Donald J. Trump, which can decide whether to maintain or enforce the rules, said tech executives and other people familiar with the exchanges.
Microsoft and Oracle declined to comment.
Biden officials have also clashed over regulations. Commerce Secretary Gina M. Raimondo, who is more sympathetic to the industry's complaints and had concerns about how the Trump administration would implement the rules, has been at odds with the White House and other agencies, according to three officials and other people familiar. with the discussions. , who declined to be identified to discuss private deliberations.
Some U.S. allies expressed concern about the rules, officials said. And in a Dec. 19 letter to the Biden administration, bipartisan lawmakers on the Senate Commerce Committee criticized the restrictions as “draconian” and said they would “seriously hamper the sale of American technology abroad.”
After the White House decided to move forward, the Commerce Department pushed for additional changes to the rule, including increasing the number of chips that can be sold without a license and delaying implementation of the rule for 120 days. to allow the Trump administration to potentially make changes, two officials said.
It's unclear what Trump would do about it, although he has recently expressed support for building data centers in the United States. His advisers include some China skeptics who are likely to favor tighter restrictions. Others, including the president's son-in-law, Jared Kushner, have business ties to Middle Eastern countries that would likely oppose any restrictions.
The new rules build on export controls that the Biden administration has implemented in recent years to ban shipments of advanced ai chips to China and other adversary countries and require special licenses to ship ai chips to countries including the Middle East. and the Southeast. Asia.
These controls have allowed the United States to exert some global influence. To gain access to Nvidia chips last year, G42, a leading artificial intelligence company in the United Arab Emirates, promised to give up its use of technology made by Huawei, a Chinese telecommunications company under US sanctions.
But concerns have grown in the United States that Chinese companies are obtaining critical technology by smuggling chips or by remotely accessing data centers in other countries.
Companies have also faced long waits to obtain licenses, even for small quantities of chips, and foreign officials have appealed directly to the Biden administration to try to obtain them. That's why officials began working last year on a more transparent distribution system.
tech companies say the requirements could make data centers too expensive for some nations, preventing some from using ai to benefit their healthcare, transportation and hospitality industries. Countries that would face caps and other restrictions include traditional U.S. allies such as Israel, Mexico and NATO member Poland.
“We can all agree that none of these workloads or uses of ai technology and the GPUs they depend on constitute national security concerns,” said Ken Glueck, executive vice president at Oracle, in a blog post from the company referring to graphics processing units or ai chips. .
Nvidia and other technology companies have also argued that the rules could backfire by driving buyers from the Middle East, Southeast Asia and elsewhere to Chinese companies like Huawei.
Some US officials disagree. An analysis that U.S. officials produced, including for consultation with private industry, argued that Chinese chipmakers faced significant obstacles and would not be able to export enough chips to train cutting-edge artificial intelligence models. The analysis was seen by The New York Times.
“Huawei is struggling to make enough advanced chips to train ai models inside China, let alone export chips,” said Matt Pottinger, Trump's former deputy national security adviser and CEO of Garnaut Global, a research firm focused on China. .
