An eleventh-hour move by the Biden Administration to regulate how American AI technology is shared with the world is coming under fire from the nation’s tech sector.

According to the White House, the Interim Final Rule on Artificial Intelligence Diffusion (IFR) streamlines licensing hurdles for both large and small chip orders, bolsters U.S. AI leadership, and provides clarity to allied and partner nations about how they can benefit from AI. It added that it builds on previous chip controls by thwarting smuggling, closing other loopholes, and raising AI security standards.

The new rule is necessary, it maintained, “[t]o enhance U.S. national security and economic strength.”

“[I]t is essential that we do not offshore this critical technology and that the world’s AI runs on American rails,” it asserted. “It is important to work with AI companies and foreign governments to put in place critical security and trust standards as they build out their AI ecosystems.”

Stephen Kowski, field CTO of SlashNext, a computer and network security company in Pleasanton, Calif., explained that the rule attempts to strike an essential balance between protecting advanced AI capabilities and maintaining technological leadership.

“Given the increasing sophistication of cyberthreats and potential misuse of AI systems, securing AI infrastructure and computing resources is crucial,” he told TechNewsWorld. “Strong controls on AI chip exports can help prevent advanced capabilities from being used in ways that could compromise security or enable malicious activities.”

“Fundamentally, economic innovation and national security are only as strong as your technology — can work over a short period, as IBM showcased for several decades, it can also create a trend away from your technology, which is also what happened to IBM and could now happen to the U.S.,” he told TechNewsWorld. “This move, while tactically sound, is strategically suicidal for AI technology in the U.S. long term.”

“I think the rule was well-meaning but poorly thought through by people who either don’t understand the technology or the market in which the technology operates,” he added. “It will likely hurt U.S. AI interests and safety in the long term in exchange for questionable short-term benefits, making U.S. companies unable to compete with their foreign counterparts during a time when U.S. tech is superior and assure it won’t be that way long-term.”

“China’s capabilities are increasing faster than the U.S.’s largely due to China’s government taking a far more aggressive stance on assisting with tech advancements,” Enderle said. “If the U.S. doesn’t respond appropriately, the tech market will follow oil, trains, electronics, and automobiles to other countries, most likely China.”

Kris Bondi, CEO and co-founder of Mimoto, a threat detection and response company in San Francisco, added that one of the most frustrating things about decrees from any administration is that they tend to be all or nothing. “Regulations are needed, but they should be on access, monitoring, and the usage of AI,” she told TechNewsWorld.

“While I agree that the use and protection of AI is critical for U.S. national security and economic strength, this form of isolationism will undermine innovation,” she said. “Not every advancement is produced on U.S. soil. Instead of protecting, the bubble this rule will create will limit the ability of the U.S. to evolve and compete on a global scale.”