U.S. prepares AI chip restrictions to close China's backdoor access

Washington plans rules limiting semiconductor shipments to some countries accused of supplying Beijing

- Liza Lin & Asa Fitch

The U.S. is preparing rules that would restrict the sale of advanced artificial intelligence chips in certain parts of the world in an attempt to limit China's ability to access them, according to people familiar with the matter.

The rules are aimed at China, but they threaten to create conflict between the U.S. and nations that may not want their purchases of chips micromanaged from Washington.

In a series of measures dating to October 2022 and updated this month, the Biden administration has tried to block Chinese access to the most-advanced chips as well as chip-making equipment and other technology.

It says the goal is to prevent China from using AI to advance its military and surveillance capabilities.

The latest round of curbs could come this month, weeks before President-elect Donald Trump takes office.

Among the restrictions, the administration aims to introduce caps on shipments of AI chips to certain countries for use in large computing facilities, people familiar with the plans said.

One grouping of countries—close U.S. allies—would be unrestricted, the people said, while another tier of countries would face limits on the number of chips that can go into data centers used for AI.

Chinese companies are banned from purchasing advanced AI chips without a license from the Commerce Department.

The purchasing caps primarily apply to regions such as Southeast Asia and the Middle East, the people said.

The rules cover cutting-edge processors known as GPUs, or graphic processing units, which are used to train and run large-scale AI models.

The regulations are aimed at halting China's access to computing power housed in other countries, some of the people said.

The rule, titled Export Control Framework for AI Diffusion, was submitted to the Regulatory Information Service Center on Monday, according to the center's website.

The website doesn't detail the rule.