The U.S. government announced new restrictions on AI chip and technology exports, aiming to maintain its global leadership in AI while limiting access for adversaries like China, Russia, Iran, and North Korea. These regulations will cap AI chip exports to most nations, grant unlimited access to close allies, and impose strict controls on global AI chip and technology flow.
The size of the artificial intelligence (AI) chip market is expected to reach $457.65 billion by 2032 from $29.9 billion in 2023.
Gartner report earlier said revenue from AI semiconductors is expected to total $71 billion in 2024. AI chips revenue from compute electronics is projected to total $33.4 billion, which will account for 47 percent of total AI semiconductors revenue in 2024. AI chips revenue from automotive electronics is expected to reach $7.1 billion and $1.8 billion from consumer electronics in 2024.
The rules, unveiled at the end of President Joe Biden’s term, build on a four-year strategy to curb China’s military advancement through restricted access to advanced chips. They introduce stricter measures, closing loopholes and reinforcing export limits.
Major chipmakers like Nvidia and AMD saw their stock prices dip following the announcement, while cloud service providers like Microsoft, Google, and Amazon face new licensing and operational restrictions, Reuters news report said.
The regulations divide the world into tiers, exempting about 18 nations, including Japan and South Korea, from the new rules. Roughly 120 countries, such as Singapore and Saudi Arabia, face export caps, while arms-embargoed countries are barred entirely. U.S. cloud providers will also face restrictions on deploying AI computing power outside Tier 1 nations.
Industry players, including Nvidia, criticized the move as overreach, arguing it could hinder U.S. competitiveness.
Meanwhile, China’s Commerce Ministry pledged to protect its interests, highlighting tensions between national security priorities and global AI development. U.S. officials emphasized the transformative potential of AI, stressing the importance of safeguarding national security while managing the technology’s risks and benefits.
Baburajan Kizhakedath
