The Biden administration announced a bold and controversial new export control scheme today, designed to prevent advanced chips and artificial intelligence model themselves from ending the hands of opponents like China.

The administration’s new “AI Diffusion rule” divides the world into countries that are allowed unfettered access to America’s most advanced AI silicon and algorithms, and those that require special licenses to – access to technology. The rule, which will be implemented by the Commerce Department’s Bureau of Industry and Security, also seeks to restrict the movement of the most powerful AI models for the first time.

“The US is leading the world in AI today, the development of AI and the design of AI chips, and it’s important that we continue to do so,” said US Commerce Secretary Gina Raimondo before today’s announcement. .

The list of trusted countries is UK, Canada, Australia, Japan, France, Germany, Belgium, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden and Taiwan.

Companies in other countries not subject to arms controls can acquire up to 1,700 of the latest AI chips without special permission, the rule said. They can apply for a special license to acquire more chips, to build large datacenters using US technology, or to gain access to the most powerful closed model “weights” that made by US companies. Companies must have adequate physical and cyber-security to obtain a license.

Supply chain activities, including the design, manufacture, and storage of chips are exempt from the rule. The rule also does not restrict open source AI models like Meta’s Llama, the administration says.

Countries with arms embargoes such as China, Iran, and North Korea are now prohibited from obtaining advanced chips. The new rule will restrict their access to advanced models for the first time.

“Semiconductors that power (AI) and model weights, as we all know, is a dual-use technology,” added Raimondo before the announcement. “It is used in many commercial applications, but can also be used by our adversaries to run nuclear simulations, create bio-weapons and develop their militaries.”

The rule is sure to spark controversy, however, as it could throttle international AI sales at a critical moment for the industry. This comes a week before Trump’s inauguration. The ruling sets a 120-day consultation period, meaning Donald Trump’s administration is expected to listen to input, perhaps change the rule, and then implement it.

NvidiaTHE the world’s leading manufacturer of AI chipscalled the “unprecedented and mistaken” rule of a blog post. “While masquerading as an ‘anti-China’ move, these rules do nothing to improve US security. Instead of mitigating any threat, Biden’s new rules will only weaken global America’s competitiveness, which undermines the innovation that keeps the US moving forward.

It’s the US restricts the export of advanced AI chips to Chinaa key geopolitical rival, but companies there have been able to build cutting-edge algorithms using computer clusters located in other countries. Under the new rule, China will not be able to produce so-called frontier AI models in other countries affected by the rule.