US sees AI chips as industrial security and treasure not to be shared freely

Thirty years after microchips were reduced to commodities, they are once again strategic for the United States.

Washington bans (something it’s good at) AI chips and directs manufacturing (something it’s very bad at). Chips are playing an increasing role in facial recognition systems and other biometric recognition systems.

The federal government has restricted exports of domestically designed artificial intelligence chips to China and Russia, ostensibly to deny them military use of key semiconductors. Today, that means Nvidia’s A100 and H100 GPUs and AMD’s MI250 will have to find new markets. Future chips could also be retained.

There is also an economic motivation. China’s autocratic rulers have made it clear that they want their nation to become the preeminent AI power soon. Washington does not want to help them.

This is technically a new licensing requirement that must be met before sales can be made. There are unlikely to be many – or realistically any – exceptions to the rule, but calling it a license change may make it easier to create exceptions than if it were a ban. .

Sanctions have been imposed on some Chinese and Russian companies for both political reasons (to pressure the government to respect human rights, for example) and for strategic reasons, including an attempt to respond to allegations of illicit surveillance in facial recognition systems developed in China.

Tech news publisher The Verge found information about the stock in an update from Nvidia to the Securities and Exchange Commission. The chipmaker said that even if it doesn’t sell to Russian buyers, it could lose $400 million in Chinese sales in the third quarter.

Then there’s the $50 billion Chips for America fund that the US Department of Commerce created under the Chips and Science Act to help restart large-scale domestic chip manufacturing.

Earlier this year, the department issued a request for information, seeking information on how best to build cores powerful enough to reintegrate U.S. chipmakers into the economy.

Few surprising pieces of advice made their way into the report by the National Institute of Standards and Technology: offering federal tax credits, strong intellectual property protection for businesses, creating cost-sharing and matching funds, for example.

Slightly closer to the ground, respondents to the RFI said supply chains need to be addressed as there is “a complete absence” of a chip manufacturing supply chain.

That’s a big question, though. The United States largely financed and managed the reconstruction of Europe after World War II through the Marshall Plan, but today it struggles to rebuild basic national infrastructure. Add to that political and industrial opposition to the federal government being active in free markets, and it’s hard to see how this will succeed.

Article topics

AI chips | AMD | biometrics | China | CHIPS and Science Act | facial recognition | legislation | Nvidia | research and development | Russia | United States

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