US and China AI-tech standoff shows signs of spreading to other countries

The emergence of high-level artificial intelligence (AI) technology has caused the United States and China to safeguard their resources in a race to develop the most powerful systems.

A tense relationship is developing between the two world powers, as the Biden Administration announced it would limit Chinese tech investments in semiconductors, quantum computing and AI.

This move subsequently sparked concerns from regulators in other countries, with lawmakers in the United Kingdom and the European Union considering their next move in response to the U.S. action.

The U.S. guards AI and other tech

On Aug. 9, The White House released two executive notes about AI developments in full or in part. The first outlined a new opportunity for hackers to compete for monetary compensation by using AI to help secure U.S. infrastructure from cybersecurity vulnerabilities.

However, the second defined China, Hong Kong and Macau as a “country of concern.” It stated the U.S. would regulate investments in such countries and sectors that “covered national security technologies and products.”

This included semiconductors, which are often used in the development of AI, microelectronics and quantum information technologies. It deemed these sectors “critical for the military, intelligence, surveillance, or cyber-enabled capabilities of a country of concern.”

The document read:

“Rapid advancement in semiconductors and microelectronics, quantum information technologies, and artificial intelligence capabilities by these countries significantly enhances their ability to conduct activities that threaten the national security of the United States.“

Currently, only the countries mentioned above were included in the note, though in a remark to Reuters, a Biden administration official said other countries could be added in the future.

The U.S. has already been cracking down on outward investments in Chinese technologies, along with Chinese access to services and products coming from the United States.

In October 2022, U.S. regulators placed bans on the export of semiconductor chips to China, which are needed to create high-powered AI systems, and have since expressed the desire to further restrict their availability.

China responds to tech spat with the U.S.

China immediately responded to the announcement from the Biden administration in a statement via the official channel of the Chinese Embassy in the United States.

The Chinese Ministry of Foreign Affairs spokesperson said it “strongly deplores and firmly opposes” the “single-minded” decisions of the U.S. on its investments in China. It said such a move politicizes business engagement and “overstretches” security concepts.

“This is blatant economic coercion and tech bullying, an act that seriously violates the principles of market economy and fair competition…”

The statement continued, calling the move “de-globalization” and an effort to phase China out of the scene.

China said it will follow the developments closely and will work in favor of its rights. 

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In response to previous U.S. measures around restricting AI technologies, China announced it would be tightening its controls on the export of AI chip-making materials.

In an Aug. 10 report from the Financial Times, sources close to the matter said that China’s internet giants, including Baidu, ByteDance, Tencent and Alibaba, have all made billion-dollar orders of Nvidia A800 processors in fears of even tighter controls from the United States.

The EU and U.K. consider the recent restrictions

Biden’s action against China immediately sparked responses from regulators overseas.

On Aug. 10, a spokesperson from the office of U.K. Prime Minister Rishi Sunak said the new orders clarify the U.S. position and the U.K. will consider the measures as it continues to “assess potential national security risks attached to some investments.“

Sunak and Biden signed an agreement to strengthen their alliance in June, which included deepening ties in areas such as advanced technologies like AI.

The European Commission made a statement on the same day, saying it would also analyze the U.S. decision.

European regulators have been actively monitoring developments in the AI sector and have been among the first to propose laws around the development and rollout of the tech.

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