Analysts predicted shipping restrictions would hurt Beijing's A.I. goals and reduce sales for American semiconductor producers.
To reinforce limitations put in place in October to check China's advancements in supercomputing and artificial intelligence, the Biden administration on Tuesday imposed further curbs on American companies' sales of sophisticated semiconductors.
The regulations can potentially stop most shipments of cutting-edge semiconductors from the U.S. to Chinese data centers, which utilize them to create models with artificial intelligence. More American businesses wanting to export sophisticated chips or manufacturing equipment to China must alert the government or apply for a special license.
The United States will also require chip manufacturers to get permits to ship to dozens of other nations subject to U.S. arms embargoes to reduce the danger that sophisticated U.S. chips will be transported to China via other countries.
The Biden administration contends that China's access to such cutting-edge technology poses a threat since it may help the nation's military with operations like directing hypersonic missiles, erecting sophisticated surveillance systems, or deciphering top-secret American codes. If not properly handled, the technology might pose existential hazards to civilization, leading A.I. specialists have said.
However, there are important commercial uses for artificial intelligence, and the more stringent regulations may have an impact on Chinese businesses that have been working to create A.I. chatbots, such as ByteDance, the parent company of TikTok, or the internet behemoth Baidu, according to industry observers. The limitations may eventually damage China's economy because A.I. is revolutionizing industries ranging from retail to health care.
The restrictions could impact sales to China by American semiconductor manufacturers like Nvidia, AMD, and Intel. Some chip manufacturers have spent recent months campaigning against harsher limits since Chinese consumers account for up to a third of their income.
According to U.S. officials, chips only used in commercial applications, such as cellphones, laptops, electric vehicles, and gaming systems, will not be subject to the regulations. While some rules may go into force sooner, most will in 30 days.
Major chip makers' representative, the Semiconductor Industry Association, said in a statement that it assessed the effects of the revised restrictions.
The organization stated, "We appreciate the necessity to safeguard national security and believe preserving a robust U.S. semiconductor sector is critical to accomplishing that aim. Unilateral rules that are too broad run the danger of damaging the American semiconductor industry while doing nothing to advance national security.
A representative for Nvidia stated that the business complies with all relevant laws and that, given the high demand for its products worldwide, it did not anticipate any material short-term effects on its financial performance.
A senior administration official said in a call with reporters on Monday that the United States had observed attempts to circumvent earlier regulations and that recent advances in generative artificial intelligence had given regulators more insight into how the so-called large language models underlying it were being developed and used.
Gina M. Raimondo, the secretary of commerce, stated that the modifications were made "to ensure that these rules are as effective as possible" and that she anticipated the rules would be modified at least once a year as technology developed.
"The goal is the same as it's always been," she said, referring to the People's Republic of China, "to restrict P.R.C. access to advanced semiconductors that could fuel advancements in artificial intelligence and sophisticated computers that are essential to P.R.C. military applications."
She continued that controlling technology is more crucial than ever in terms of national security.
When the Biden administration attempts to strengthen ties with China and prepare for a prospective meeting between President Biden and China's top leader, Xi Jinping, in California next month, the stricter regulations may enrage Chinese officials.
On Wednesday, a Chinese commerce ministry representative said that the United States "continues to generalize the concept of national security, abuses export control measures, and implements unilateral bullying." China is adamantly opposed to this and is deeply unhappy with it.
By investing money in new chip manufacturing in the United States, the Biden administration has attempted to challenge China's expanding mastery of cutting-edge technology. It has concurrently attempted to impose tight but limited limitations on the sale of technology to China that may be used for military purposes while allowing other trade to proceed unhindered. According to U.S. officials, the tactic is to keep American technology in "a small yard and high fence."
However, it has been hard to identify the technologies that represent a threat to national security. Major semiconductor manufacturers have warned that excessively onerous trade restrictions may prevent them from generating the money they require to build new factories and research facilities in the United States.
According to some detractors, the restrictions would encourage China to create alternative technology, ultimately reducing American influence worldwide. Chinese researchers' development of homegrown sophisticated processors has improved significantly, but analysts claim the nation still needs to catch up to Western capabilities.
The greatest winner from the artificial intelligence boom, Nvidia, may be severely affected by the modifications revealed on Tuesday.
Nvidia created new processors, the A800 and H800, for the Chinese market in response to the Biden administration's first significant limitations on artificial intelligence chips a year prior. These chips operated at slower rates but could still be used by Chinese businesses to train A.I. models. According to a senior administration official, the new regulations will limit those transactions.
According to Nvidia, 20 to 25 percent of the company's data center sales, including other goods in addition to the processors that power A.I., come from China on average. Analysts predicted the business could offset such losses by selling to other markets due to the increasing demand for Nvidia processors used in artificial intelligence. However, worries about how additional performance restrictions will affect a larger range of Nvidia processors led to a more than 3% decline in the stock price on Tuesday.
In addition, the government added two Chinese chip design firms and their subsidiaries — divisions of Moore Threads Technology and Biren Technology — to an "entity list" that required special authorization before U.S. businesses could send goods to them.
A new "gray list" requiring manufacturers of some less sophisticated semiconductors to inform the government if they are selling them to China, Iran, or other nations subject to a U.S. arms embargo was also announced by the United States.
"What strikes me is the significant expansion of countries to which exports will now require a license," said Emily Benson, an analyst at the Center for Strategic and International Studies, a think tank in Washington.
The regulations did not restrict access for Chinese businesses to international cloud services provided by Microsoft and Amazon. Because Chinese companies had been using those services as a backdoor to obtain cutting-edge artificial intelligence chips outside of China, the administration has recently considered cracking down on that industry. However, Ms. Benson noted that a later executive order may enact such a provision.
Julian Evans-Pritchard, head of China economics at the research company Capital Economics, stated in a letter to clients last week that the consequences of the limitations will become more obvious when non-Chinese businesses release more sophisticated versions of their present goods.
As a result, Mr. Evans-Pritchard stated, "U.S. export controls will hinder China's ability to reach the technological frontier in the development of large-scale A.I. models." He said this may have wider ramifications for the Chinese economy since "we think A.I. has the potential to be a game changer for productivity growth over the next few decades."
This site uses Google AdSense ad intent links. AdSense automatically generates these links and they may help creators earn money.
.jpg)
0 Comments