Last week we reported that Malaysia would be imposed a full access restriction on artificial intelligence (AI) center chips by the United States. Today it was confirmed by U.S. Secretary of Commerce Gina Raimondo, which was done to ensure that the United States continues to be the world leader in AI technology.
Through the directive issued by President Joe Biden, countries in the world are divided into three levels. Level 1 is for 18 allied countries such as Japan, Taiwan, the UK and Australia who are given unlimited access to chips.
Level 2 is for countries such as Malaysia, Singapore, Israel and the UAE where each country has a limit on computing power to access chips. Level 3 is for enemy countries such as Russia, China and Iran who are prevented from accessing chips with US technology.
However, Malaysia does not need to worry about its dream of becoming a regional data center being affected because Microsoft, Google and Amazon have been given permission to build AI data centers without any limits on the computing power of the country they are built in.
But companies based in the United States are only allowed to place 50% of their computing power abroad. They also cannot place more than 25% of their computing power outside Tier 1 countries and a maximum of 7% of their computing power in a single Tier 2 country.
Since the AI chip purchase restrictions were imposed on them two years ago, China has been accessing computing power in the cloud in data centers located in the Asian region. President Biden’s order today is an effort to close the loophole that China has used to bypass this AI hardware barrier.
Immediately after the announcement, NVIDIA said this was an “out of bounds” action that restricts technology that already exists in gaming computers and consumer hardware. Oracle said earlier this month that the order would cause the market to shift to Chinese-made AI chips and GPUs, which would only hurt American companies.