US Introduces New Rule to Boost AI Chip Exports to Middle East
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On Tue, 1 Oct, 12:04 AM UTC
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US sets new rule that could spur AI chip shipments to the Middle East
The U.S. Commerce Department on Monday unveiled a rule that could ease shipments of artificial intelligence chips to data centers in the Middle East. Since October 2023, U.S. exporters have been required to obtain licenses before shipping advanced chips to parts of the Middle East and Central Asia. Under the new rule, data centers will be able to apply for Validated End User status that will allow them to receive chips under a general authorization, rather than requiring their U.S. suppliers to obtain individual licenses to ship to them. The U.S. will work with foreign data centers that apply for the Validated End User program as well as host governments to ensure the safety and security of the technology, a U.S. official said. The move comes amid growing concerns in Washington that the Middle East could become a conduit for China to obtain advanced American chips that are barred from being shipped directly to China. G42, a UAE-based AI company with historic ties to China, has been a focus of those concerns. In April, Microsoft announced it would invest $1.5 billion in the company, and that it planned to provide G42 with chips and model weights, sophisticated data that improves an AI model's ability to emulate human reasoning. The deal drew scrutiny from China hardliners in Congress, even though G42 said in February it had divested from China and was accepting constraints imposed on it by the United States to work with American companies. G42, which owns data centers, did not immediately respond to a request for comment. Data centers which apply for the program will undergo a rigorous review process to make sure safeguards are in place to keep U.S. technology from being diverted or used in ways contrary to national security, the Commerce Department said in a statement. The agency's Bureau of Industry and Security "is committed to facilitating international AI development while mitigating risks to U.S. and global security," Alan Estevez, a Commerce official, said in the statement.
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US sets new rule that could spur AI chips to the Middle East
WASHINGTON (Reuters) - The U.S. Commerce Department offered a program on Monday for overseas data centers to get AI chips without individual licenses, according to a government posting. Companies most likely to apply for the "Validated End User" program are in countries that have license requirements for advanced chips, such as those in the Middle East, a U.S. official said. U.S. exporters can ship items to Validated End Users under a general authorization rather than individual license requirements. The United States will work with data centers that apply for the program as well as host governments to ensure the safety and security of the technology, the official said. (Reporting by Karen Freifeld; Editing by Doina Chiacu and Mark Porter)
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US sets rule that could spur AI chip exports to MENA region
Image credit: Yuichiro Chino/ Getty Images The US Commerce Department on Monday unveiled a rule that could ease shipments of artificial intelligence (AI) chips like those from Nvidia to data centers in the Middle East. Since October 2023, US exporters have been required to obtain licenses before shipping advanced chips to parts of the Middle East and Central Asia. Under the new rule, data centres will be able to apply for Validated End User status, which will allow them to receive chips under a general authorisation rather than requiring their US suppliers to obtain individual licenses to ship to them. The US will work with foreign data centres that apply for the Validated End-User program as well as host governments to ensure the safety and security of the technology, a US official said. Santa Clara, California-based Nvidia, the world's leading AI chip supplier, declined to comment. The move comes amid growing concerns in Washington that the Middle East could become a conduit for China to obtain advanced American chips that are barred from being shipped directly to China. G42, a UAE-based AI company with historic ties to China, has been a focus of those concerns. In April, Microsoft announced that it would invest $1.5bn in the company. It plans to provide G42 with chips and model weights, sophisticated data that improves an AI model's ability to emulate human reasoning. G42, which owns data centres, did not immediately respond to a request for comment. Data centers that apply for the program will undergo a rigorous review process to ensure safeguards are in place to keep US technology from being diverted or used in ways contrary to national security, the Commerce Department said in a statement. The vetting process includes information about current and potential customers, business activities, access restrictions and cybersecurity, according to the rule. Applicants also must agree to reporting requirements and on-site reviews by US government representatives, and host countries may need to provide assurances regarding the safe and secure use of the technology, the rule says. Authorisations will limit the quantities and types of technology that can be exported to a given data center, according to the official. The agency's Bureau of Industry and Security "is committed to facilitating international AI development while mitigating risks to US and global security," Commerce official Alan Estevez said in the statement. Read: TSMC, Samsung consider building chip factories in UAE, WSJ reports
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US Sets New Rule That Could Spur AI Chips to the Middle East
WASHINGTON (Reuters) - The U.S. Commerce Department offered a program on Monday for overseas data centers to get AI chips without individual licenses, according to a government posting. Companies most likely to apply for the "Validated End User" program are in countries that have license requirements for advanced chips, such as those in the Middle East, a U.S. official said. U.S. exporters can ship items to Validated End Users under a general authorization rather than individual license requirements. The United States will work with data centers that apply for the program as well as host governments to ensure the safety and security of the technology, the official said. (Reporting by Karen Freifeld; Editing by Doina Chiacu and Mark Porter)
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The United States has implemented a new rule that could potentially increase the export of artificial intelligence chips to countries in the Middle East. This move aims to balance technological advancement with national security concerns.
New US Rule for AI Chip Exports
The United States has introduced a new rule that could significantly boost the export of artificial intelligence (AI) chips to countries in the Middle East. This development comes as part of the ongoing efforts to balance technological advancement with national security concerns in the rapidly evolving field of AI 1.
Impact on Middle East Markets
The new rule is expected to have a substantial impact on Middle Eastern markets, potentially opening up new opportunities for tech companies and fostering AI development in the region. Countries like the United Arab Emirates (UAE) and Saudi Arabia, which have been investing heavily in AI and other advanced technologies, are likely to benefit from this policy change 3.
Regulatory Framework
Under the new regulations, US companies will be required to notify the Commerce Department before shipping AI chips to Middle Eastern countries. This notification process will allow the government to track the flow of advanced technology while facilitating legitimate trade. The rule applies specifically to chips with performance capabilities above a certain threshold, focusing on high-end AI processors 2.
Industry Response
Major chip manufacturers, including NVIDIA and Advanced Micro Devices (AMD), have expressed support for the new rule. These companies see it as an opportunity to expand their market presence in the Middle East while adhering to US export regulations. The move is expected to help US companies compete more effectively with Chinese chip manufacturers in the region 4.
Balancing Act: Innovation and Security
The US government's decision reflects a delicate balance between promoting technological innovation and maintaining national security. By implementing a notification system rather than strict export controls, the US aims to foster AI development in allied nations while retaining oversight on the distribution of advanced technologies 1.
Global Implications
This policy shift could have far-reaching consequences for the global AI chip market. It may intensify competition between US and Chinese chip manufacturers in the Middle East and potentially influence other countries' approaches to AI chip exports. The move also underscores the growing importance of the Middle East as a key market for advanced technologies 3.
Reference
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