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Who Wins If The New Biden AI Export Rules Stand?
The latest salvo of AI export restrictions from the Biden administration has sent shockwaves through the technology industry. While Nvidia and other American tech companies have voiced their discontent with these new rules, some might benefit from this restrictive approach. I’d like to highlight two potential winners: Chinese technology firms and US cloud server providers.
It’s no secret that China is making significant strides in the development of AI talent. A recent report from the US White House reveals that China produced 99 percent more S&E PhDs than the United States in 2022 – nearly double the gap in 2018. Meanwhile, India has been quietly building a massive pool of AI experts as well. The absence of access to American AI hardware will not slow them down; instead, it will likely accelerate their progress.
Chinese tech firms, such as those building AI chips and models, can capitalize on this growing demand for AI solutions in the rest-of-the-world (RoW). As Nvidia pointed out, these restrictions would limit sales to countries beyond the 18 “lucky ones.” This presents an opportunity for Chinese companies to fill the vacuum and establish themselves as major players in the global AI market. It’s no surprise that corks are popping in Shanghai.
On the other hand, US cloud server providers can benefit from this situation by cornering the market in countries excluded from the list of 18 privileged nations. These firms will be well-positioned to offer subpar alternatives or even inferior hardware, as mentioned earlier, which would further exacerbate the divide between those who have access to cutting-edge AI tools and those who don’t.
The net effect is that American technology companies will be unable to realize their full potential by selling to a broader client base. Meanwhile, Chinese firms will step in to fill the void and US cloud server providers will reap the benefits of this market vacuum. It’s disconcerting to see the Biden administration help China challenge America’s hard-earned technological leadership in AI.
In conclusion, it’s essential to reevaluate these export restrictions and their unintended consequences on the global AI landscape.
Source: www.forbes.com
