The U.S. Bureau of Industry and Security (BIS) has recently introduced the tiered framework for licensing and exporting Artificial Intelligence chips.
- Objective: To ensure the AI chip technology does not reach the ‘countries of concern’ or U.S. adversaries and ensure that model weights are stored outside the U.S. “only under stringent security conditions”.
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Highlights of the Tiered Framework
- The new regulations update existing rules for export, re-export and transfers (in-country) by segregating countries into three tiers (each tier harbouring different rules for licensing and authorisation).
- The First Tier: There will be NO restrictions for the export, re-export or transfer of advanced computing chips to 18 U.S. allies and partners, including
- Australia, Belgium, Canada, South Korea, U.K. and Japan etc
- The Second Tier: It introduces caps on volume and exemptions based on specifications alongside mandatory authorisation and licensing. India is put under this tier.
- There will be a country-specific cap on computing power equivalent to 50,000 advanced GPUs (worth about $1 billion).
- However, the cap could be doubled if these countries sign a pact with the US to uphold strict security standards.
- The Third Tier: It includes arms-embargoed countries, such as North Korea, Iraq, Iran and Russia, among others. These countries will have NO access to the technology.
Impact on India
- AI Hardware Infrastructure: The rules will challenge India’s plan for large scale building and deploying AI hardware, crucial for the local development of emerging technologies due to uncertainties surrounding licensing and trade negotiations.
- Downsizing: Large-scale AI data centres requiring hundreds of thousands of GPUs, may experience delays or be downsized, potentially putting global companies at a competitive advantage over Indian firms.
- Leverage: The USA might use the regulation as leverage to secure tariff concessions or ease qualitative restrictions such as the PC import regime.
- Hinder India’s National AI Mission: Restricted access to GPUs could hinder India’s AI ambitions beyond 2027 as the country ramps up its AI initiatives.
- The government is sourcing nearly 10,000 GPUs (graphics processing units) under the ambitious Rs 10,738-crore India AI Mission.
- Competitive Advantage: Restricted access to advanced AI chips could slow innovation, raise costs due to licensing requirements, and introduce operational delays affecting India;s competitive advantage.
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About Advanced Computer Chips and AI Model Weights
- Advanced Computing Chips are chips used in advanced computing systems, such as supercomputers and advanced artificial intelligence (AI).
- Enforcement: The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce controls the export of advanced computing chips and semiconductor manufacturing equipment.
- Application:
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- Military: They are used in military systems, including weapons of mass destruction, radar, and signals intelligence
- Human rights: Advanced computing chips are used in facial recognition surveillance systems that can be used to repress and surveil minorities and political dissidents
- Advanced analytics and Machine learning: Advanced computing chips are used in advanced analytics applications and for machine learning
- AI Model Weights: AI models are software programs that comprise a series of mathematical operations.
- They are numerical parameters within an AI model that help determine the model’s outputs in response to inputs.
- The weights for advanced AI models can be produced only by computationally intensive model training that can take months.
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