A chip manufacture machine Photo: VCG

A technology industry group representing companies like Amazon, Microsoft and Meta on Tuesday urged President Joe Biden's administration to refrain from issuing a rule that would control global access to artificial intelligence (AI) chips, warning that the restrictions would jeopardize US leadership in AI. 

The rule, which could come out as soon as Friday, would place arbitrary constraints on US companies' ability to sell computing systems overseas and cede the global market to competitors, Reuters reported on Tuesday.

The Information Technology Industry Council (lTl) CEO Jason Oxman criticized the administration's "insistence" on publishing the rule in the final days of Biden's presidency, according to a letter the council sent to US Commerce Secretary Gina Raimondo, the Reuters report said.

"Rushing a consequential and complex rule to completion could have significant adverse consequences," Oxman said in the January 7 letter, a copy of which was obtained by Reuters.

As of the press times, neither the US' Commerce Department nor the White House have responded to requests for comment. Reuters said the industry opposition to the expected rule has become increasingly blunt and public.

"The main reason behind such opposition is that even during the last days, the Biden administration still plans to issue such measures, including restrictions on key industries related to chips and their applications. This in essence lays a landmine for US companies," Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday. 

Zhou noted that these restrictions introduce substantial uncertainty for emerging technologies, affecting not only their development models, but also limiting their innovation potential and market opportunities.

"The US-based businesses once had multiple avenues for innovation. Under the new rule, it has become increasingly challenging for them to sustain both existing and potential global partnerships," Zhou said. "This will disrupt their product development timelines, prolong the return on investment, and reduce their overall profitability."

"Companies hope to see policies that protect and promote corporate innovation and global collaboration, as both are essential for driving progress in fields such as AI," the expert said, adding that the new rule that undermines free trade will only weaken the US' leadership in AI industry.

The Biden Administration's "Export Control Framework for Artificial Intelligence Diffusion" will go down as one of the most destructive to ever hit the US technology industry, Ken Glueck, executive vice president at Oracle, said in a blog post on Sunday.

Reuters said while a key aim of the restrictions is to keep AI from supercharging China's military capabilities, they will only limit the development of the US tech industry.

Li Yong, a senior research fellow at the China Association of International Trade, said that some US politicians' decisions often prioritize short-term political gains, while disregarding the market principles and the concept of free trade.

The Biden administration's approach will ultimately harm US's businesses and compromise the country's interests, stifling innovation and competitiveness within the US tech sector. Despite any restrictions imposed by the US, China's tech sector will remain steadfast in advancing independent innovation and self-reliant development in response to external pressure, according to Li.

Li called on both sides to reap greater benefits through joint development, stressing that market fragmentation potentially caused by the US will further hinder the growth of US companies.

China has repeatedly criticized the US' ever-expanding restrictions in the semiconductor industry. In responding to a report that the US was preparing to further restrict exports to Chinese chip tool makers on December 2, the Chinese Foreign Ministry said that China firmly opposes the US's overstretching the concept of national security, abusing export controls, and maliciously blocking and suppressing China.

"This type of behavior seriously violates the laws of market economy and the principle of fair competition, disrupts international economic and trade order, destabilizes global industrial and supply chains, and will eventually harm the interests of all countries," Lin Jian, a spokesperson for the ministry said at the time. "China will take resolute measures to firmly defend the legitimate and lawful rights and interests of Chinese companies."