Nvidia CEO Jensen Huang presents a Grace Blackwell NVLink72 at the Consumer Electronics Show (CES) in Las Vegas, Nevada last week. (Photo by Patrick T. Fallon / AFP)
Nvidia CEO Jensen Huang presents a Grace Blackwell NVLink72 at the Consumer Electronics Show (CES) in Las Vegas, Nevada last week. (Photo by Patrick T. Fallon / AFP)

The New Cold War: AI Chip Trading

The U.S. government has recently restricted the trade of advanced chips used for artificial intelligence (AI) applications. Why?

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The United States has introduced new measures to regulate the trade of advanced chips designed for AI applications. These restrictions aim to strengthen national security, protect the country’s technological leadership, and consolidate strategic alliances amidst growing global competition in the semiconductor sector. This marks a new chapter in the technological cold war, as the measures explicitly target limiting China’s access to this kind of technology.

The Department of Commerce announced that the new rules restrict the export of AI chips to rival countries, especially China, while facilitating access for allied nations. These regulations update measures implemented in 2023, which had already limited the export of certain AI chips to countries identified as strategic competitors.

According to Secretary of Commerce Gina Raimondo, the U.S. continues to lead in both AI development and advanced chip design, and these restrictions aim to ensure that this advantage is maintained. The regulations will take effect in 120 days, allowing the incoming administration of Donald Trump to make further adjustments if necessary.

In response to the announcement, China declared that these restrictions are a "flagrant violation" of international trade rules. The announcement "is another example of the generalization of the concept of national security and the abuse of export control, and is a flagrant violation of international economic and trade rules," the Chinese Ministry of Commerce said in a statement.

Additionally, the European Union expressed concern that the new export rules announced by the US would affect some member states and their companies. The continental block insisted that Europe did not represent a "security risk" for the US.

"We are concerned about the US measures adopted," respective EU tech and trade chiefs Henna Virkkunen and Maros Sefcovic said in a statement. "We believe it is also in the US economic and security interest that the EU buys advanced AI chips from the US without limitations: we cooperate closely, in particular in the field of security, and represent an economic opportunity for the US, not a security risk."

AI is a critical technology for enhancing efficiency and effectiveness in sectors such as healthcare and defense. However, its large-scale adoption presents significant challenges, including a growing energy demand. In response, companies like Google, Microsoft, and Amazon have initiated nuclear energy projects to sustain the data centers required for advanced AI applications.

Chip development also plays a central role, as these devices are the backbone of computational capabilities. At CES 2025, Nvidia unveiled the GeForce RTX 50 series, powered by the Blackwell architecture, which integrates advanced AI capabilities to enhance graphical performance. These GPUs, such as the RTX 5090 and RTX 5070, provide significant improvements in AI-driven rendering, enabling hyper-realistic graphics and optimized gaming experiences. The DLSS 4 technology incorporated in these GPUs allows for multiple frames to be generated using AI, increasing rendering efficiency and improving visual quality in demanding applications.

Additionally, Nvidia announced Project DIGITS, a personal supercomputer designed for AI developers and enthusiasts. This compact system, powered by the new GB10 Grace Blackwell superchip, can handle AI models with up to 200 billion parameters, simplifying the development and deployment of AI solutions without relying on cloud infrastructure. With a starting price of $3,000, Project DIGITS aims to democratize access to advanced AI tools, enabling researchers and students to execute complex models more affordably and efficiently.

Although the competitive advantage of AI may be marginal due to the increasing speed of information flow, export restrictions on advanced chips carry strategic weight. These measures are intended to limit access for competitors like China to the technology needed to develop similar capabilities.

National Security Advisor Jake Sullivan explained that the new rules would make it more difficult for strategic competitors to use smuggling and remote access to circumvent export controls. They also create incentives for allies to adopt reliable suppliers of advanced AI technology.

From Biden to Trump

The focus on protecting U.S. technological leadership has the backing of both the outgoing Biden administration and the incoming Trump administration. This bipartisan consensus underscores the strategic importance both political sectors assign to AI development and control.

During the presidential campaign, Trump received significant support from major tech firms, which anticipate a "golden era" under his leadership. These companies expect favorable policies combining clear regulations with incentives for the research and development of cutting-edge technologies. The new chip regulations could become a key tool for bolstering U.S. competitiveness in this field.

The path of restrictions may bring collateral effects. Advanced chips are essential for a wide range of applications, from autonomous vehicles to defense systems. By limiting access, the U.S. seeks to prevent sensitive technologies from being used to strengthen rival powers. However, these measures could also provoke trade tensions with affected countries, especially if they view these actions as a form of protectionism.

The regulations also include enhanced security parameters for AI data centers using imported chips, highlighting concerns about protecting critical infrastructure and sensitive information from potential cyber threats.

In recent years, competition for technological leadership in AI has escalated. Both the U.S. and China are making substantial investments in this domain, aiming to establish themselves as global leaders. Trade restrictions and efforts to secure a technological edge are not only about consolidating the U.S. position but also about limiting competitors' progress.

AI also raises fundamental questions about sustainability. Generating sufficient power to sustain large-scale operations is a challenge being addressed by leading tech companies through nuclear energy projects. This reflects a growing interdependence between technological development and energy resources, as well as the need for comprehensive solutions to address future challenges.

The U.S. decision to implement new measures for AI chip trade strengthens its position in the global race for technological leadership. While these restrictions may be seen as a response to tensions with China, they also underscore the importance of safeguarding the development of critical technologies in a world where AI is transforming both the economy and security. As this technological "cold war" unfolds, the control of semiconductors and AI will remain central issues on the global agenda.

 

With information from AFP

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