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FILE PHOTO: Semiconductor chips are seen on a printed circuit board in this illustration picture taken February 17, 2023.
The US-China chip stranglehold
The Biden administration has already imposed severe restrictions on semiconductor companies selling to China through export controls. But now it’s considering additional steps to maintain an edge over its rival in the East. The new measures would reportedly restrict China’s ability to access a specific chip architecture known as gate all around, or GAA. GAA is a powerful type of transistor that large chipmakers — including AMD, Intel, Nvidia, and Samsung — are planning to mass produce in the next year.
The US Commerce Department, which oversees export controls, hasn’t confirmed whether or when the rules will be finalized. But the administration has been dead set on limiting China’s access to chips they can use to train and run AI applications — an attitude that’ll only intensify as AI technology becomes more mature and more useful.
With a weak economy making retaliatory tariffs unlikely, Beijing is left with few responses other than subsidizing its domestic industry, which still lags behind the US.
--FILE--View of the headquarters of Microsoft China Research and Development Group in Beijing, China, 30 September 2016.
Is it time for US AI companies to leave China?
Microsoft has asked 700-800 of its China-based employees working on cloud computing and artificial intelligence to leave the country, extending them offers of employment in different countries including the US. While these employees will have the option to stay put, the move signals Microsoft’s awareness that it may not be tenable to be a US company working on AI within China for much longer.
Last week, American and Chinese officials met to discuss artificial intelligence policy in Geneva, Switzerland. White House National Security Council spokesperson Adrienne Watson said US officials “raised concerns over the misuse of AI” by China (without giving specifics), which pushed back against American “restrictions and pressure” on their use of the technology. In the past two years, the Biden administration has imposed strict export controls limiting the flow of semiconductors to China and its allies, hampering its ability to train and run AI models and applications.
Increasingly, companies are caught in the middle of these tensions — especially those like Microsoft and Amazon interested in serving both economies and tapping into China’s talent pool. The White House is also considering a new rule that would require licenses to sell cloud services to Chinese customers, a move that could further hinder Microsoft’s revenue in the country — and lodge the US government between China and the American firms they need to scale up AI capabilities.