The United States proposed limits on exports of AI technology that would dramatically expand previous restrictions, creating a new international hierarchy for access to advanced chips and models.
What’s new: The Biden administration, which will transition to leadership under incoming President Trump next week, issued new rules that restrict exports of AI chips and models to most countries beyond a select group of close allies. The rules, which are not yet final, would create a three-tier system that limits exports to a number of close allies and blocks access entirely to China, Iran, North Korea, Russia, and others. They also would introduce the U.S.’ first-ever restrictions on exporting closed weights for large AI models.
How it works: The restrictions were announced shortly after a leak reached the press. A public comment period of 120 days will enable the incoming U.S. Presidential administration to consider input from the business and diplomatic communities and modify the rules before they take effect. The rules are scheduled to take effect in one year.
- A new hierarchy divides nations into three groups that would have different degrees of access to AI chips both designed in the U.S. and manufactured abroad using U.S. technology, as well as proprietary AI models.
- Tier 1: Australia, Japan, Taiwan, the United Kingdom, and most of Europe would retain nearly unrestricted access. However, these nations must keep 75 percent of their AI computing power within allied countries. No more than 10 percent can be transferred to any single country outside this group to ensure that advanced AI development remains concentrated among close U.S. allies.
- Tier 2: Traditional U.S. allies and trade partners like Israel, Saudi Arabia, and Singapore face an initial cap of 507 million units of total processing power (TPP) — roughly the computational capacity of 32,000 Nvidia H100 chips — through the first quarter of 2025. The cap would increase to 1.02 billion TPP by 2027. U.S. companies that operate in these countries can apply for higher limits: 633 million TPP in Q1 2025, rising to 5.064 billion TPP by Q1 2027.
- Tier 3: China, Russia, and around two dozen other countries are blocked from receiving advanced AI chips, model weights, and specialized knowledge related to these systems.
- The U.S. Commerce Department’s export control agency must approve the export of models or transfer of weights of closed models that were trained using more than 1026 computational operations. These rules target future systems, as no known models today used this amount of computation during training.
- Companies based in the U.S. must maintain at least 50 percent of their total AI computing power within U.S. borders. They also must track distribution of their models, implement security measures, and submit to regular audits.
Behind the news: The proposed rules build on 2022’s CHIPS and Science Act, which was designed to strengthen domestic semiconductor production and restrict technologies abroad that could bear on U.S. security. An initial round of restrictions in late 2022 barred semiconductor suppliers AMD and Nvidia from selling advanced chips to Chinese firms. In November 2024, the U.S. tightened restrictions further, ordering Taiwan Semiconductor Manufacturing Company, which fabricates those chips, to halt production of advanced chips destined for China.
Plus green AI infrastructure: In addition, President Biden issued an executive order to encourage the rapid build-out of computing infrastructure for AI. The federal government will hold competitions among private companies to lease sites it owns for the building of data centers at private expense. The selection of sites will take into account availability of sources of clean energy, including support for nuclear energy. The government will expedite permitting on these sites and support development of energy transmission lines around them. It will also encourage international allies to invest in AI infrastructure powered by clean energy.
Why it matters: Protecting the United States’ advantages in high tech has been a rising priority for the White House over the past decade. The earlier export restrictions forced many Chinese AI developers to rely on less-powerful hardware. The new limits are likely to have a far broader impact. They could force developers in the Tier 2 and Tier 3 countries to build less resource-intensive models and lead them to collaborate more closely with each other, reducing the value of U.S.-made technology worldwide. They could hurt U.S. chip vendors, which have warned that the rules could weaken U.S. competitiveness in the global economy. They could also force companies that are building huge data centers to process AI calculations to reconsider their plans.
We’re thinking: The Biden administration’s embargo on AI chips has been leaky. So far, it has slowed down adversaries only slightly while spurring significant investment in potential suppliers that aren’t connected to the U.S. While the public comment period invites lobbying and industry feedback, ultimately geopolitical priorities may hold sway. Whatever the outcome, reducing the world’s dependence on U.S. chips and models would result in a very different global AI ecosystem.