Illustration: Shoshana Gordon/Axios
Sweeping new export controls for advanced AI chips and models are sparking fury from industry players who see an opportunity to secure changes through the incoming Trump administration.
Why it matters: Republicans have to make peace with competing goals — to foster innovation through deregulation and to put guardrails up in the name of national security.
- How these rules are handled will be an early test.
State of play: Companies will have an opportunity with the Trump administration to try to reverse the Export Control Framework for AI Diffusion.
- There is a 120-day window to give the incoming administration feedback on the rules, which Commerce Secretary Gina Raimondo says she fully expects could result in changes to the policy.
The rules could run up against Elon Musk's government efficiency project.
- A senior administration official said Commerce's Bureau of Industry and Security has agents around the world and law enforcement support to set up the licensing regime, but could use more.
Between the lines: The rules don't apply to China. They apply to the rest of the world.
- Companies can continue exporting advanced chips and AI models freely to 20 allied nations.
- Arms-embargoed countries were already cut off from advanced chips and they will now also be cut off from advanced models.
- All other countries will be subject to license requirements.
Some in industry say the rules will do nothing to boost national security and instead will undermine U.S. competitiveness.
- The Semiconductor Industry Association said the new rules will cause unintended consequences, and noted several regulations have already been implemented in recent years to restrict advanced chips.
- ITIF, a tech think tank, laid out alternative policies, including expanding market access for chips and AI, focusing on lawful and beneficial AI exports, and recognizing the economic implications of chip sourcing decisions.
Zoom in: Nvidia in a blog post said the rules would "control technology worldwide that is already widely available in mainstream gaming PCs and consumer hardware."
- There are exemptions in the rules that would allow for the flow of such products, but Nvidia's Tim Teter told Axios they create a "legal morass."
- The rules cover compute thresholds that Nvidia achieved a long time ago, and there are undefined terms around chips intended for the design of data centers that create risk and uncertainty.
- "That's why thank heavens for the 120 days, because we're going to have to get the Trump administration to look at this," Teter said.
The other side: The point of the licensing regime is to increase the government's visibility into shipments. That visibility would make it harder for China to gain access to U.S. chips through third countries.
- Smuggling to China, including Nvidia AI chips, is a broadly recognized problem.
