Nvidia flatters Trump in response to Biden’s new AI chip restrictions

Nvidia is cozying up to the incoming Trump administration after criticizing new AI rules just announced by the Biden administration meant to keep advanced chips and AI models under the control of the United States and its allies. The President-elect will ultimately have the final decision on whether to enforce the new AI rules.

If implemented, the “Interim Final Rule on Artificial Intelligence Diffusion” announced today would place new limitations on how many artificial intelligence chips companies can send to different countries without making special agreements with the US government. Nvidia will be impacted the most by this, given its estimated 90 percent share of AI chips.

The new rules aim to close loopholes that would allow countries like China and Russia — which are already subject to existing semiconductor trade restrictions — to obtain or develop their own AI technology. The Biden administration wants to keep transformational AI development under the control of the US and 18 of its allies, which include the UK, Canada, Germany, Japan, Taiwan, and South Korea. All other countries will be subject to caps that restrict AI chip imports.

“In the wrong hands, powerful AI systems have the potential to exacerbate significant national security risks, including by enabling the development of weapons of mass destruction, supporting powerful offensive cyber operations, and aiding human rights abuses, such as mass surveillance,” the White House said in a statement. “Today, countries of concern actively employ AI – including US-made AI – in this way, and seek to undermine US AI leadership.”

Nvidia says that the new “AI Diffusion” restrictions threaten to derail worldwide “innovation and economic growth,” and undermine the prior Trump administration’s efforts to create a successful environment for AI development.

“In its last days in office, the Biden Administration seeks to undermine America’s leadership with a 200+ page regulatory morass, drafted in secret and without proper legislative review,” Nvidia said in a statement. “This sweeping overreach would impose bureaucratic control over how America’s leading semiconductors, computers, systems, and even software are designed and marketed globally.”

“The first Trump Administration laid the foundation for America’s current strength and success in AI, fostering an environment where US industry could compete and win on merit without compromising national security,” reads Nvidia’s statement. “Rather than mitigate any threat, the new Biden rules would only weaken America’s global competitiveness, undermining the innovation that has kept the US ahead.”

“We look forward to a return to policies that strengthen American leadership, bolster our economy and preserve our competitive edge in AI and beyond,” Nvidia says in conclusion.

Nvidia is notably not among the list of tech companies that have donated to Trump’s inaugural fund and CEO Jensen Huang has not been invited to Mar-a-Lago. Perhaps that will change now that Nvidia has reason to court favor.

In addition to curbing AI chip exports, the rules also set security standards to control the “weights” for AI models — the unique parameters that determine how each AI model makes its predictions. Companies like Microsoft and Google that operate data centers can also apply for special government accreditations that allow them to trade AI chips with fewer restrictions, in exchange for following security standards outlined by the Biden administration.

New data center rules aim to keep the development of the most advanced AI models within the borders of the United States and its partners. According to the New York Times, Microsoft says it could “comply fully with this rule’s high security standards and meet the technology needs of countries and customers around the world that rely on us,” in a statement attributed to Microsoft president Brad Smith.