Biden administration spurs new battle with rules governing AI's global spread

The next big fight over offshoring is playing out in Washington, and this time it involves artificial intelligence.

The Biden administration, in its final weeks in office, is rushing to issue new regulations to try to ensure that the United States and its close allies have control over how artificial intelligence develops in the years to come.

The rules have touched off an intense fight between tech companies and the government, as well as among administration officials.


The regulations, which could be issued as early as Friday, would dictate where American-made chips that are critical for AI could be shipped. Those rules would then help determine where the data centers that create AI would be built, with a preference for the United States and its allies.

The rules would allow most European countries, Japan and other close U.S. allies to make unfettered purchases of AI chips, while blocking two dozen adversaries, including China and Russia, from buying them. More than 100 other countries would face different quotas on the amount of AI chips they could receive from U.S. companies.

The regulations would also make it easier for AI chips to be sent to trusted American companies, like Google and Microsoft, than to their foreign competitors. The rules would establish security procedures that data centers would have to follow to keep AI systems safe from cybertheft.

The Biden administration's plan has prompted swift pushback from American tech companies, which say global regulations could slow their businesses and create costly compliance requirements.

While some of the details remain unclear, the new rules may force tech companies that are building data centers around the world to rethink some locations.

The rules are largely about national security: The regulations are designed to keep the most powerful technology in the hands of allies and prevent China from getting access to AI chips through international data centers.

Some labor unions have come out in support of the Biden administration's plan. That's because data centers are huge consumers of electricity and steel.

But U.S. tech companies and their supporters argue that the rules could hold back technological developments, strain alliances and motivate countries to buy alternative technologies from China.