Biden Administration Moves to Prevent China’s Use of US AI Technology

Summary

  • The Biden administration is undertaking significant steps to prevent China from leveraging U.S. technology for its artificial intelligence (AI) advancements, due to emerging security implications.
  • The anticipated “know your customer” regulation is set to mandate U.S. cloud computing companies to authenticate the identity of foreign users, with significant implications for technology giants such as Amazon’s AWS, Google’s Google Cloud, and Microsoft’s Azure unit.
  • This marks a crucial move by the U.S government, amid its longstanding concerns over China’s growth in AI technology on national security perspectives.

U.S. Moves to Shield Tech from China

The Biden government is initiating various approaches to prevent China from utilizing U.S. technology for AI, given the growing sector’s potential security issues.

The proposed “know your customer” guideline was made available for public review last Friday and is expected to be officially published on Monday.

Raimondo’s Perspective on China’s Use of U.S. Cloud

Expressing her concern, Raimondo voiced that the U.S. is making concerted attempts to thwart China from acquiring the computing power necessary for training AI models. The worry is that China might circumvent this by utilizing our cloud to train their AI models.

Nvidia’s Involvement and Commerce’s Decision

Previously, Raimondo stated that the Commerce Department will not authorize Nvidia to export its high-performance AI chips to China, as this would significantly empower China’s frontier AI models.

The U.S. Government’s Preventive Measures

The U.S. government is apprehensive about China developing high-tech AI systems that might affect national security. In response, they have initiated measures to prevent Beijing from accessing cutting-edge U.S. tech that could enhance its military capabilities.

Verifying Foreign Users

The suggested regulation would necessitate U.S. cloud computing firms to authenticate the identity of their foreign users via a “know-your-customer” or “Customer Identification Program”. This would establish a baseline for identifying foreign users and compel cloud computing firms to affirm compliance annually.

Tech Industry’s Reaction

Carl Szabo, NetChoice’s General Counsel, argued that complying with the proposed “know your customer” directive could potentially impede international collaboration.

Outstanding Cloud Providers

The leading providers in the cloud computing sector are Amazon.com’s AWS, Alphabet’s Google Cloud, and Microsoft’s Azure unit.

From a trading perspective, the developments could potentially generate volatility in the stocks of leading U.S. tech firms such as Amazon, Alphabet, and Microsoft, and influence decision-making in the forex market considering the international implications.

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