U.S. export controls have to ‘change continually

BEIJING — Extra controls on tech exports to China might be coming as wanted, regardless of enterprise considerations, U.S. Commerce Secretary Gina Raimondo informed CNBC in an unique interview.

“We have to change constantly,” Raimondo informed CNBC’s Morgan Brennan over the weekend on the sidelines of the Reagan Nationwide Protection Discussion board.

“I know that’s hard for industry. They want a clear line in the sand,” the commerce secretary mentioned. “The truth of it is though, technology changes, China changes and we have to keep up with it.”

In October 2022, the U.S. Division of Commerce’s Bureau of Trade and Safety announced sweeping export controls that prohibit the flexibility of firms to promote sure superior computing semiconductors or associated manufacturing tools to China.

“It was a bold move, but we thought it was necessary because these semiconductors are unbelievably powerful, and we can’t afford to let them get into the wrong hands,” Raimondo mentioned, acknowledging that “the threat from China is large and growing.”

The U.S. has mentioned it is targeted on limiting China’s navy, however the controls additionally come as each international locations search to develop their synthetic intelligence capabilities within the wake of OpenAI’s launch of ChatGPT.

Throughout a protection discussion board panel Brennan moderated on Saturday, Raimondo additionally mentioned she is engaged on a brand new approach to prohibit China’s entry to sure applied sciences by establishing “a continuous dialogue” between enterprise and authorities engineers.

“If you redesign a chip around a particular cut line that enables [China] to do AI I’m going to control it the very next day,” Raimondo mentioned.

U.S. chipmaking big Nvidia final month reportedly delayed the launch of a brand new AI chip for China that had been designed to technically comply with U.S. export controls.

“We’re in touch with Nvidia,” Raimondo mentioned within the interview with CNBC. “They are crystal clear. They don’t want to violate our export controls. And you know, we want them to sell chips to China. That’s fine. They just can’t sell the most sophisticated AI chips to China.”

When requested about Raimondo’s feedback on blocking sure China chip gross sales, Nvidia mentioned in a press release to CNBC: “We are engaged with the U.S. government and, following the government’s clear guidelines, are working to offer compliant data center solutions to customers worldwide.”

Nvidia has been one of the vital high-profile firms affected by U.S. export controls since its superior semiconductors are broadly used for coaching synthetic intelligence fashions. The corporate warned in August final yr it could lose $400 million in potential sales in China as a consequence of U.S. restrictions.

Raimondo informed CNBC she is contemplating related controls on the “most sophisticated AI and all the products that flow from that,” in addition to biotechnology and quantum computing.

“What I cannot have industry do is in any way violate the intention of our export controls,” she mentioned. “They have to follow the rule and the spirit of the law. And as long as they, or any company, does that, it’s fine.”

U.S. President Joe Biden, who’s up for reelection subsequent yr, signed a invoice final yr aimed at supporting U.S. semiconductor development with tens of billions of {dollars}.

The Chinese language authorities has in the meantime doubled down efforts to construct up its personal semiconductor and tech trade.

Raimondo informed CNBC “it’s not realistic” to assume the U.S. can cease China’s technological improvement, however slightly that the aim was “slowing them down.”

“We still sell billions of dollars a year in semiconductors to China,” she mentioned. “We just cannot let them access the most sophisticated, cutting edge artificial intelligence chips.”

“Ultimately, we just have to run faster. Do more, run faster, so we can always be ahead.”

— CNBC’s Kristina Partsinevelos contributed to this report.