In a move that could have far-reaching implications for the global AI industry, the Biden administration has introduced new guidelines for exporting U.S.-made AI chips, just a week before the end of its term. The Interim Final Rule on AI diffusion, announced on Monday, aims to provide clarity to allied and partner nations about how they can benefit from AI and streamline licensing hurdles for chip orders.

However, the new rules also introduce significant restrictions on the sale of AI chips to the majority of countries in the world. According to reporting from CNN, the guidelines split countries into three groups: the U.S.'s strongest allies, such as Japan and South Korea, which are exempt from the new restrictions; countries like China and Russia, which already face significant restrictions and will now face further limitations; and a third group, comprising most of the world, which will be subject to caps on the number of chips they can purchase.

The third group, which includes countries like Mexico, Portugal, and Israel, among many others, is arguably the most affected by the changes. The restrictions on this group are intended to prevent adversaries like China and Russia from buying chips through them, but critics argue that they will also hinder the adoption of AI in these countries.

Nvidia, a leading AI chip manufacturer, has expressed strong opposition to the proposed rules, calling them "unprecedented and misguided" and warning that they would "derail" innovation and economic growth worldwide. The company's statement highlights the concerns of many in the AI industry, who fear that the new guidelines will stifle innovation and limit access to AI technology.

The new guidelines build on guidance released by the Biden administration in October 2022 and October 2023. The proposal includes a 120-day comment period, but the rules will take effect before that period is over, according to CNN reporting. This has raised concerns about the rushed nature of the decision and the potential for unintended consequences.

With a new administration set to take office next week, the conversation around chip export restrictions could look completely different by the end of the month. The fate of the new guidelines remains uncertain, and it is unclear whether they will be maintained, modified, or reversed by the incoming administration.

As the AI industry continues to grapple with the implications of the new guidelines, one thing is clear: the decision has sparked a critical conversation about the role of government in regulating AI technology and the potential consequences of restricting access to AI chips. As the industry looks to the future, it remains to be seen how these guidelines will shape the development of AI and its adoption around the world.