US said to plan new limits on China's AI and supercomputing firms

It's not yet clear which Chinese firms and labs would be affected. PHOTO: REUTERS

WASHINGTON - The Biden administration is expected to announce new measures to restrict Chinese companies from getting access to technologies that enable high-performance computing, according to several people familiar with the matter, the latest in a series of moves aimed at hobbling Beijing's ambitions to craft next-generation weapons and automate large-scale surveillance systems.

The measures, which could be announced as soon as this week, would be some of the most significant steps taken by the Biden administration to cut off China's access to advanced semiconductor technology.

They would build on a Trump-era rule that struck a blow to Chinese telecom giant Huawei by prohibiting companies around the world from sending it products made with the use of American technology, machinery or software.

A number of Chinese firms, government research labs and other entities are expected to face restrictions similar to Huawei, according to two people with knowledge of the plans.

In effect, any firm that uses American-made technologies would be blocked from selling to the Chinese entities that are targeted by the administration.

It's not yet clear which Chinese firms and labs would be affected.

The broad expansion of what is known as the foreign direct product rule is just one part of Washington's planned restrictions. The administration is also expected to try to control the sale of cutting-edge US-made tools to China's domestic semiconductor industry.

Washington also plans to limit US-made microchips from being sold to China's most powerful supercomputing and data centre projects, the people said.

That limitation could end up inhibiting the ability of major academic institutions and internet firms such as Alibaba and Tencent from getting the parts they need to build leading data centres and supercomputers.

Over time, as supercomputer performance levels rise, the cap could seriously hinder China's ability to develop the powerful number crunching technology that forms the building block of innovations across an array of fields, including the biosciences, artificial intelligence and missile engineering. Curbs on chips and chip-making tools were reported earlier by Reuters.

The Biden administration has also been readying an executive order that would allow the government to scrutinise the investments that US companies made abroad for national security risks, and considering other measures that could apply to Chinese memory-chip maker Yangtze Memory Technologies Company, or YMTC, several people familiar with the discussions said.

Mr Orville Schell, a longtime China scholar at the Asia Society, said the US government was moving to separate American and Chinese supply chains on semiconductors and semiconductor technology, given their importance not just for national economies but also weapons systems and other military applications.

In the last one to two months, US officials have become increasingly concerned with Chinese companies that make midrange semiconductors, not just the smallest, most cutting-edge technology, Mr Schell said.

That's because those older products are still critical components for weapons, and officials do not want Chinese chipmakers to use technology from the United States or partner nations to produce those chips. And they do not want the Chinese companies to become global suppliers.

"That's quite a remarkable expansion of our concerns," he said, adding that YMTC was a prime example of this kind of company.

The White House declined to comment on the planned restrictions. A spokesperson for the Bureau of Industry and Security at the Commerce Department, which has authority over the types of technology that companies can export out of the United States, said they could not confirm anything at this point.

If enacted, the measures will be the strongest push to date by the United States to hit at China's flourishing supercomputer and data centre market.

Many Chinese universities, state-run companies and internet firms run supercomputers that have a range of abilities. Plenty are used for important, if prosaic, tasks such as analysing road traffic, managing social networks or predicting weather, but analysts and researchers have shown how others are used for more malign purposes.

China has used some supercomputers to power invasive surveillance systems that target ethnic minorities. Others have been used by Beijing to model nuclear blasts and design next-generation weapons that could evade American defences.

The export controls are part of a bigger strategy from the Biden administration to starve China of key technologies while pumping money into US chip-making factories. The measures come as Beijing ramps up its aggression toward Taiwan, which produces almost all of the world's advanced semiconductors.

The Biden administration has cited its broad use of export controls as a powerful tool to punish Russia for its invasion of Ukraine, saying it will cripple Russia's defence, technology, energy and other critical sectors in the long term.

US officials say they can apply the same tool to other rival nations, notably China, to address national security challenges. The officials say the Trump administration's use of export controls aimed at hobbling Huawei served as a model for how they formulated the controls on Russian companies. NYTIMES

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