US Export Control Rules on AI Chips Spark Backlash

A decision by the Biden administration to limit international access to American-made advanced artificial intelligence chips is facing backlash from countries whose purchasing power the rule affects.

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Export controls enacted during the administration’s final week seeks to choke the supply of advanced chips to China, including transshipments through third countries. The controls split the world into three categories: a group of close U.S. allies that have no restrictions, a second group with capped access to AI chip imports and a third that is banned from buying the semiconductor materials (see: White House Moves to Restrict AI Chip Exports).

The cap applies to 17 European Union members, while 10 others face no restrictions to access microchips needed to train AI models. The European Commission raised concerns, saying that the European access to an unfettered market for AI chips is “an economic opportunity for the U.S., not a security risk.”

The move is “incomprehensible and is not based on any substantive reasons,” Poland’s Deputy Prime Minister and Minister of Digital Affairs Krzysztof Gawkowski said on X, formerly Twitter, appealing to his country’s foreign minister Radoslaw Sikorski and the EU’s tech chief Henna Virkkunen to address the issue. Parts of the new export controls are anticipatory: they limit the export and overseas training of proprietary AI model weights above a certain threshold that no existing model meets.

The impact is not limited to EU countries. An Israeli Parliament panel called an emergency meeting after the announcement. “The new regulations will no doubt have strategic repercussions as they will obligate the ministry to explain the purpose of every purchase of an AI chip,” The Times of Israel reported, citing Lt. Col. Elad Dvir, head of the Defense Ministry’s AI branch. Technology makes up about 20% of Israel’s gross domestic product, with U.S. tech giants Nvidia, Intel, Alphabet and Apple developing chips in the country and employing thousands of local software engineers.

Companies whose technology is being restricted, including Nvidia and Oracle, have warned of unintended consequences, with the Oracle describing the controls as “the most destructive to ever hit the U.S. technology industry” and as “by far history’s worst government technology idea.”

The news comes at a time when China is competing vigorously in AI. Expert opinion is divided on whether China lags in AI development, but the country has shown some evidence to the contrary. Biden’s announcement on the chip restrictions came on the heels of Chinese company DeepSeek releasing its latest open-source AI model outperformed American open-source language ones on some benchmarks, using a less-powerful version of a chip the United States banned for export to China.

The Biden administration has said China lacks capacity to export advanced AI chips at scale and is instead stockpiling chips. Until China develops robust manufacturing capabilities, U.S. firms will retain dominance in the global AI chip market – but once China strengthens its production capabilities, this edge could erode. But it takes up to a decade to make machines that can manufacture advanced new chips, time China doesn’t have.