The next big battle over offshoring is brewing in Washington, and this time it involves artificial intelligence.
The Biden administration, in the final weeks of its term, is rushing to issue new rules to ensure that the United States and its close allies have control over how artificial intelligence develops in the years to come.
The rules have touched off an intense battle between tech companies and the government as well as administration officials.
The rules, which could be issued as soon as Friday, will dictate where American-made chips critical to AI can be sent. Those rules would then help determine where data centers producing AI will be built, giving priority to the United States and its allies.
The rules will allow most European countries, Japan and other close US allies to unhindered purchase of AI chips, while blocking two dozen adversaries such as China and Russia from buying them. More than 100 other countries will face various quotas on the amount of AI chips they receive from US companies.
The regulations would also make it easier to ship AI chips to trusted US companies that run data centers, such as Google and Microsoft, than to their foreign competitors. The rules will establish security procedures that data centers must follow to keep AI systems safe from cyber theft.
The Biden administration plan has drawn sharp pushback from U.S. tech companies, who say global regulations could slow their businesses and create costly compliance requirements. Those companies also question whether President Biden should institute rules with such far-reaching economic consequences in his final days in office.
Although some details remain unclear, the new rules could force tech companies that are investing tens of billions of dollars in building data centers around the world to reconsider some of those locations.
Artificial intelligence, which can answer questions, write code and draw pictures, is expected to revolutionize the way countries fight wars, develop medicines and provide scientific breakthroughs. Because of its potential power, US officials want AI systems to be built in the United States or allied countries – where they would have more say over what the systems do – rather than in countries that might share that technology with China. or may act in other ways adverse to U.S. national security.
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 lead in AI and the right to decide which countries can benefit from it.
“It’s important to think about how we want to implement those transformative developments around the world,” he said.
The rules are largely about national security: Given the way AI could transform military conflict, the rules are designed to keep the most powerful technology in the hands of allies and give China access to AI chips through international data centers. Designed to prevent circumvention of US sanctions by obtaining ,
But US officials say data centers are also an important source of new economic activity for American communities. They want to encourage companies to build more data centers in the United States rather than in areas like the Middle East, which is offering funding to attract tech companies.
Some labor unions have come out in support of the Biden administration’s plan. This is because data centers are big consumers of electricity and steel. Each creates work for construction companies, electricians and HVAC technicians, as well as workers involved in energy production.
United Steelworkers union advisor Michael R. Wessel said, “Labor is very interested in the future of AI and technology, not just in terms of its application but in terms of the infrastructure that supports it.”
But US tech companies and their supporters argue that the rules could stifle technological development, strain international alliances, hurt US companies and push countries to buy alternative technology from China, which Rushing to develop its own AI chips.
“The risk is that in the long term, countries are going to say, ‘We can’t trust the United States, we can’t import our advanced technology from the United States, because there’s always the risk that the U.S. government will do that. Going to do.” Take it away from us,” said Jeffrey Gertz, a senior fellow 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 has Microsoft, Oracle and other companies. They worry the rules could hurt international sales.
Ned Finkel, 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 “push the world toward alternative technologies.”
Mr. Finkel said, “We would encourage President Biden not to preempt incoming President Trump by enacting policy that will only harm the American economy, set America back and play into the hands of America’s adversaries. “
Tech companies have supported newly elected President Donald J. It has also tried to minimize the impact by appealing to Trump’s incoming administration, which could decide whether to maintain or enforce the rules, technology executives and others familiar with the exchanges said.
Microsoft and Oracle declined to comment.
It is unclear what Mr. Trump will do on the issue, although he has recently expressed support for building data centers in the United States. His advisers also include some China skeptics who are in favor of tougher sanctions. Others, including the president’s son-in-law Jared Kushner, have business ties to countries in the Middle East that may oppose any sanctions.
The new rules build on export controls the Biden administration has imposed in recent years to ban shipments of advanced AI chips to China and other hostile countries and to require special licenses to send AI chips to countries in the Middle East and Southeast Asia. Has been applied.
Those controls have allowed the United States to exert some global influence. To gain access to Nvidia chips last year, the UAE’s leading AI firm G42 promised to abandon the use of technology made by Chinese telecommunications firm Huawei under US sanctions.
But US concerns have grown that Chinese companies are obtaining critical technology through smuggling of chips or remote access to data centers in other countries.
Moreover, companies have faced long waits to obtain licenses even for small numbers of chips, and foreign officials have appealed directly to the Biden administration to try to obtain them. So officials started working on a more transparent distribution system last year.
Tech companies say the requirements are too tough and may make data centers too expensive for some countries, preventing some countries from using AI to benefit their health care, transportation and hospitality industries. Countries that would face caps and other sanctions include traditional US allies such as Israel, Mexico and NATO member Poland.
“We can all agree that AI technologies and the GPUs they rely on for any workload,” Ken Glueck, Oracle executive vice president, said in a company blog post, referring to graphic processing units, or AI chips. or the use does not cause national security concerns.” ,
Nvidia and other tech companies have also argued that the rules could drive buyers in the Middle East, Southeast Asia and elsewhere to Chinese companies like Huawei.
Some US officials have tried to counter that narrative. An analysis conducted by US officials, including consultation with private industry, argued that Chinese chip makers faced significant barriers and would not be able to export enough chips to train cutting-edge AI models. The analysis was seen by The New York Times.
“Huawei is struggling to make enough advanced chips to train AI models within China,” said Matt Pottinger, Mr. Trump’s former deputy national security adviser and chief executive of China-focused research firm Garnaut Global. So she is not doing it at all.” ,