The United States is reportedly planning to further restrict the export of AI chips

Washington (Reuters) - US President Joe Biden will impose a new round of restrictions on the export of artificial intelligence chips from Nvidia and other companies before he steps down, in a last-ditch effort to prevent advanced technology from falling into the hands of China and Russia.

Bloomberg, citing sources, reported that the U.S. government wants to limit the sale of artificial intelligence (AI) chips used in data centers at the national and corporate levels in order to focus AI research and development in friendly countries and prompt companies around the world to adopt U.S. standards.

The new rules, which could be announced as soon as Friday (January 10), deal with chip trade in three tiers, the sources said.

The highest level of chip trade involves a small number of US Allies, which will continue to have largely unrestricted access to US chips. This tier includes the United States and 18 Allies, including Germany, the Netherlands, Japan, South Korea and Taiwan.

Under the rules, companies based in these countries and regions can apply for full licenses from the U.S. government to ship chips to data centers in most parts of the world. The condition is that no more than a quarter of the total computing capacity of these companies is outside the Tier 1 countries or regions, and no more than 7 percent is in any of the Tier 2 countries or regions. They must also comply with U.S. government security requirements.

Most countries in the world fall into the second tier. Companies from these countries that are based in the United States and agree to comply with security requirements and human rights standards specified by the United States government can bypass the country cap and obtain much looser individual quotas. These companies, known as "validated end Users" (VEU), can access advanced AI chips as long as they keep at least half of their total computing power in the United States. The idea is to ensure that the United States and its Allies always have more computing power than the rest of the world, and to create a set of trusted entities to develop and deploy AI in secure environments around the world.

The third tier would be rival countries, whose semiconductor imports would effectively be blocked. That includes about two dozen countries and territories that are subject to U.S. arms embargoes, including China and Russia.

The White House National Security Council declined to comment on the reports. The Commerce Department's Bureau of Industry and Security, which controls the export of chips, also had no comment.

The semiconductor industry Association opposes the rush to introduce new measures

Nvidia has said it opposes such a proposal, citing a last-minute restriction on chip exports to much of the world as a major policy shift. In a statement, Nvidia said: "This does not reduce the risk of abuse, but threatens economic growth and American leadership." The global interest in accelerating everyday application computing is a great opportunity for the United States to cultivate, boost the economy and create jobs."

Shares of Nvidia and chipmaker Advanced Micro Devices Inc., also known as AMD, fell slightly after the report hit the street Wednesday Eastern time.

The Semiconductor Industry Association, which represents major chip makers, has also voiced opposition to such policy proposals. 'Such a broad and important new measure should not be rushed through without meaningful feedback from the industry during the presidential transition period.'

The US government has imposed a series of measures restricting the ability of US chipmakers such as Nvidia and AMD to sell advanced processors in China and Russia. The United States is also trying to prevent rival countries from acquiring cutting-edge technology through intermediaries in regions such as the Middle East and Southeast Asia. If the United States introduces new restrictions, it will be another action by the United States to block rivals' technological advancement on a global scale.