Bloomberg "South Korea and Other Tier 1 Allies Focus on AI Development"
North Korea, China, Russia Banned as Tier 3 Adversaries
Most Subject to Caps... Must Follow US Standards
The Biden administration in the United States is considering additional export restrictions on AI chips from American companies such as Nvidia until the end of its term. While semiconductor exports to key allies like South Korea will continue without restrictions, a new plan will be introduced to set total export limits for most other countries.
On the 8th (local time), Bloomberg News reported, citing sources, that the U.S. is planning to limit AI chip sales by country and company.
The measure will categorize countries into three tiers to restrict AI chip exports and is expected to be announced as early as the 10th. The goal is to concentrate AI development among allied countries and ensure that companies worldwide operate according to U.S. standards.
Bloomberg assessed that this would result in expanding semiconductor export controls to most of the world amid surging demand for AI semiconductors.
Countries in the top-tier 1 group, consisting of Asian allies such as South Korea, Japan, and Taiwan, as well as major Western allies including the United Kingdom, France, Germany, and Canada, will be able to purchase U.S.-made AI chips without restrictions as they do now. Conversely, countries in the 3rd tier such as China, Russia, North Korea, Iran, Venezuela, Cuba, Belarus, Iraq, and Syria will be blocked from importing U.S.-made AI chips.
The remaining 2nd tier group, which includes most countries worldwide, will have a total computing power cap set for imports. Imports will only be allowed within this limit. According to sources, countries in this group may set their own import caps beyond national restrictions if they agree to the security requirements and human rights standards set by the U.S. government.
The Biden administration plans to introduce a ‘Verified End User (VEU)’ regulation as part of the new export control measures. This is a type of comprehensive licensing system that allows exports only to pre-approved, trusted companies. When controlling exports of U.S.-made semiconductor equipment to China in 2023, the VEU regulation was used to grant exceptions to Samsung Electronics and SK Hynix’s local factories. The goal is to enable the global development and use of AI in a safe environment.
Bloomberg explained that this measure is based on the Biden administration’s regulatory stance to restrict U.S. semiconductor companies like Nvidia and AMD from selling advanced processors to China and Russia. The U.S. aims to prevent adversary countries from accessing advanced technology through intermediaries in the Middle East and Southeast Asia.
Nvidia opposed the measure in a statement. The company said, "End-of-term regulations that restrict exports to most of the world will not reduce the risk of (AI chip) misuse but will instead represent a significant policy shift that threatens economic growth and U.S. leadership."
Earlier, on the 6th, the Semiconductor Industry Association (SIA), of which Samsung Electronics and SK Hynix are members, issued a statement expressing concern over the unprecedented scope and complexity of the regulations, saying the Biden administration created rules that could significantly undermine U.S. leadership and competitiveness in semiconductor technology and advanced AI systems without industry consultation. They also pointed out that such policy decisions should be transferred to the next administration to allow the government and industry to work with global partners to address the issues.
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