Senators Call for Reevaluation of Biden's AI Chip Export Limits

Investing.com -- The Biden administration's plan to limit the number of artificial intelligence (AI) chips that companies can establish in computing facilities in certain countries has come under criticism from two U.S. senators. The plan is designed to restrict China's access to AI chips produced outside its borders. Exporting the most advanced AI chips manufactured by Nvidia and Advanced Micro Devices already requires a license from the Commerce Department.

Democrat Maria Cantwell from Washington and Republican Ted Cruz from Texas expressed their concerns in a letter to President Biden on Thursday. They warned that the proposed restrictions could significantly hinder the sale of U.S. technology abroad and potentially direct foreign buyers towards Chinese competitors like Huawei. The Chinese telecommunications giant Huawei has developed its own AI chips, but they perform at a lower level compared to high-end American alternatives.

The senators' letter emphasized that Congress was not consulted about the restrictions, and companies were not given the opportunity to advise on the possible consequences. They highlighted that chips are essential for U.S. leadership in a broad range of future technologies and cautioned against weakening American-based operations by imposing arbitrary limitations on product sales.

The Biden administration has frequently used export controls in its efforts to restrict China's chip industry. This includes restrictions on sales of AI chips to China and constraints on the sale of equipment used for the production of advanced chips in the country.

In addition to these measures, the administration is overseeing the Chips Act, which allocates tens of billions of dollars in funding for new chip manufacturing facilities and research and development based in the U.S.