by Fucha Qiuyu

In the final week of former U.S. President Joe Biden's administration, a "doomsday frenzy" unfolded in Washington with the introduction of the Interim Final Rule on Artificial Intelligence (AI) Diffusion. While giving its close allies and partners unrestricted access to AI-related chips, it imposes export controls or even embargoes on other countries, creating a chip export licensing system in which countries are categorized into different tiers of hierarchy.

The United States once again cites national security concerns as the pretext. Yet these measures are more likely to disrupt global technological innovation, causing a Cold War-like technological divide. Following the announcement of the new rule, stock prices of major chip companies plummeted.

The public has responded with an outcry of shock: the first global AI export controls in human history have come! Many are left to wonder what legacy the Biden administration intended to leave behind. Peace and prosperity? Or chaos and turbulence?

"DOOMSDAY FRENZY" WINS NO ONE'S HEART

The first pushback against the new rule came from the U.S. semiconductor industry.

Describing the measure as "unprecedented and misguided," Nvidia, a U.S. chips giant, said in a statement that rather than mitigate any threat, the new Biden rule would only weaken America's global competitiveness and undermine innovation that has kept the United States ahead.

Oracle Executive Vice President Ken Glueck wrote in a blog that the measure "does more to achieve extreme regulatory overreach than protect U.S. interests and those of our partners and allies. It practically enshrines the law of intended consequences and will cost the U.S. critical technology leadership."

"A policy shift of this magnitude and impact is being rushed out the door days before a presidential transition and without any meaningful input from industry. The new rule risks causing unintended and lasting damage to America's economy and global competitiveness in semiconductors and AI by ceding strategic markets to our competitors," said John Neuffer, president and CEO of the U.S. Semiconductor Industry Association.

Washington's European allies also protested. The European Commission argued that it is "in the U.S. economic and security interest that the EU buys advanced AI chips from the United States without limitations" and it represents "an economic opportunity for the United States, not a security risk."

NEITHER "SMALL YARD, HIGH FENCE" NOR "LARGE YARD, IRON CURTAIN" WILL WORK

In recent years, the Biden administration's "small yard, high fence" strategy has been an obvious self-contradiction. The New York Times reported that the strategy is "an attempt to achieve two goals that are inherently in conflict -- pursuing a fundamental shift in the geopolitics of technology competition without upending the global economic order."

The Biden administration failed on these objectives. Since the U.S. government first imposed restrictions on semiconductor exports to China in October 2022, it has cost the United States dearly both economically and diplomatically. The U.S. tech companies were concerned that a "high fence" would block them from the Chinese market. Its European and Asian allies took a cautious wait-and-see attitude toward the sudden break with Beijing.

The United States has never defined which technologies would be within the boundaries of its "small yard," and it is hard to predict which products might pose security risks, leaving the door open for expansions. Allies also worried that without effective legal safeguards, the "yard" could be greatly expanded by future administrations.

In its final days, the Biden administration was trying hastily to turn the "high fence" into an "iron curtain," with the purported intention of protecting U.S. national interests. However, be it "small yard, high fence" or "large yard, iron curtain," neither can stop the wheels of history from moving forward.

Meanwhile, adversity often fuels resilience and growth. Recent data shows that China's chip exports exceeded 1 trillion RMB yuan (136.9 billion U.S. dollars) for the first time in 2024, surpassing mobile phones to become the single commodity with the highest export value. In the first 11 months of 2024, China's chip exports grew by 20.3 percent, while its chip imports were up by 11.9 percent to 2.48 trillion yuan (339.5 billion dollars). These figures highlight the importance of China in the global semiconductor industrial chain and its increasing international competitiveness. The U.S. companies would not want to lose the Chinese market and technology. After all, companies vote with their feet -- they go wherever their interests are best served. How can that be deterred by a 200-page rule?

SAY NO TO TECHNOLOGICAL HEGEMONY

The business of hegemony is about keeping others weak. By using long-arm jurisdiction, suppression, sanctions and technological blockades, the United States has turned technological issues into political and ideological weapons, undermining other nations' right to develop, and disrupting global supply chains and international innovation cooperation.

Technological hegemony will not prevail. Some analysts predicted that global semiconductor sales would expand by 19 percent year-on-year in 2024, and 12.5 percent in 2025 to reach 687.4 billion dollars. According to Goldman Sachs, global AI investment could reach 200 billion dollars by 2025. Although it takes time to translate AI into greater productivity, the market's interest in AI has rapidly heated up, and generative AI will be increasingly integrated into daily life through devices like smartphones. Contemporary technological innovation has never been confined to one country or region. It relies on international exchanges and cooperation and the openness of the markets to progress steadily.

One country's security cannot be achieved at the expense of the development and security of others. In the final analysis, global technological advancement hinges on the intelligence, ingenuity and partnership of the entire humanity.

Editor's note: The author is a commentator on international affairs.

The views expressed in this article are those of the author and do not necessarily reflect the positions of Xinhua News Agency.

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