AI chip curbs trigger rare public fight: Tech giants vs China hawks

Tension between national security hawks and the biggest American technology companies over China policy has burst out into the open.

- Liza lin & Alexander Ward

The trigger: a Biden administration plan to limit the global sale of advanced artificial intelligence chips. It seeks to ensure the U.S. keeps control over the future of AI by blocking Beijing from accessing AI technology through third countries.

The plan drops the "mother of all regulations" and "does more to achieve extreme regulatory overreach than protect U.S. interests," said an Oracle executive vice president, Ken Glueck, in a blog post. On the other side, a Republican-led House committee urged the administration to go through with tough curbs, calling it a "once-in-a-generation moment" to block Beijing's ambitions.

The battle lines in this clasha Democratic president and leading Republicans squaring off together against a major U.S. industry are unusual enough. Just as unusual is the timing, coming in the final days of the Biden presidency.

Opponents of the new restrictions say a lame-duck government shouldn't be making sweeping policy moves.

But unlike some other areas such as oil drilling, this isn't a case of President Biden trying to thwart his successor with last-minute decisions promoting Democratic priorities. Many in the camp of President-elect Donald Trump are just as hawkish on China, and the battle by tech companies to forestall anti China policies they view as harmful is likely to continue in the new administration.

The gloves came off this week because of anticipation that the Commerce Department would imminently introduce a global export license regime for graphics processing units the type of chip critical to AI applications and set sales caps for certain countries.

The goal would be to close off loopholes that otherwise could allow China to access AI chips by tapping data centers in regions such as Southeast Asia and the Middle East.

While Commerce hasn't detailed its plans publicly, drafts of the rule have circulated in Washington, industry officials said.