Biden mulls executive order curbing AI and semiconductor sales to China.
President Biden to Sign Executive Order Limiting US Investments in China’s Key Technologies
President Joe Biden is reportedly planning to sign an executive order that will have significant implications for United States investments in key technologies in China. This move marks a further escalation in the ongoing antagonism between the two countries, particularly concerning semiconductor chips and other advanced tech.
The executive order will specifically focus on three crucial areas: semiconductors, quantum computing, and artificial intelligence. According to Bloomberg, while existing investments will remain unaffected, certain new investments will be prohibited. The White House is currently considering releasing the order in mid-August, although internal discussions may potentially delay its implementation. It is important to note that if the restrictions are indeed implemented, they will not go into effect until 2024.
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The United States and China have been engaged in a fierce battle over semiconductors and the components necessary for advanced military technology for nearly a year. The United States has been actively reducing its chip exports to China while simultaneously striving to enhance domestic chip production capabilities.
In October 2022, the Commerce Department introduced rules that placed numerous Chinese companies on an “unverified” list, significantly limiting their ability to purchase or acquire semiconductors and advanced technology without a license. Additionally, Congress passed the CHIPS Act in 2022, allocating over $52 billion to subsidize domestic chip production. As a result, Commerce Secretary Gina Raimondo announced plans to establish at least two new semiconductor factory hubs using the funds provided by the CHIPS Act. In March, President Biden also announced stricter criteria for Chinese companies to receive CHIPS funding.
In early July, Treasury Secretary Janet Yellen visited China and engaged in discussions with Chinese officials regarding the treatment of U.S. companies in the country.
China, on the other hand, has implemented its own restrictions in response. In early July, the country imposed limitations on gallium and germanium, two metals crucial for high-level chip manufacturing, citing national security concerns. Furthermore, China banned the use of chips from U.S. chip maker Micron in May.
It is worth noting that the Chinese government has also reduced its funding for chip manufacturing improvements, potentially hindering the country’s ability to keep pace with the United States in chip development.
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