U.S. rolls out new chip-related export controls as China makes industry advances
Illustration of the China and U.S. flag on a central processing unit.
Blackdovfx | Istock | Getty Images
The Biden administration is rolling out new export controls on critical technologies, including quantum computing and semiconductor goods, as China makes advances in the global chips industry.
Released by the U.S. Department of Commerce on Friday, the rules cover quantum computers and components; advanced chipmaking tools; some components and software related to metals and metal alloy; as well as high-bandwidth chips, a critical component for AI applications.
The department cited “national security and foreign policy reasons” for the move, and said it was the product of extensive discussions with international partners.
These restrictions cover worldwide exports, but adds exemptions for countries that add similar controls, such as Japan and the Netherlands have done in the past. The department’s Bureau of Industry and Security (BIS) expects more countries will move to impose similar measures.
“Today’s action ensures our national export controls keep step with rapidly evolving technologies and are more effective when we work in concert with international partners,” Alan Estevez, under secretary of the bureau, said in a statement.
“Aligning our controls on quantum and other advanced technologies makes it significantly more difficult for our adversaries to develop and deploy these technologies in ways that threaten our collective security,” he added.
Officials will hold a 60-day public comment period before issuing a final ruling.
Along with semiconductors, both China and the U.S. seek to be leaders in quantum computing, which they see as a potentially transformative technology.
Though China is not explicitly named in the documents, the controls are in line with a series of moves the Biden administration has taken to limit Beijing’s developments in areas such as AI and computing.
BIS also said it is also continuing to strengthen relationships with its allies to boost the effectiveness of export controls aimed at degrading Russia’s military capabilities, as well as its “enablers” such as Belarus and Iran.
U.S. export control efforts hit road bumps
Amid increased restrictions and tech sanctions from the Washington, Beijing has ramped up its sufficiency push, setting up billions in investments in critical technologies to strengthen its chip-making industry.
A recent analysis of China’s semiconductor technology, by Tokyo-based semiconductor research company TechanaLye, found that Chinese-made processor chips are approaching a level just three years behind the industry leader, Taiwan Semiconductor Manufacturing Co Ltd, according to Nikkei Asia.
As the U.S. continues to step up controls, the global industry has shown a degree of reluctance.
China is the largest semiconductor market in the world, and its firms remain key clients of many of the world’s leading semiconductor companies, including those in the U.S.
On Wednesday, the chief executive of Dutch chip equipment giant ASML, which is restricted from providing its industry-leading advanced semiconductor equipment to China, reportedly said that the U.S.-led restrictions have become more “economically motivated” over time, adding he expects more push-back.
The Dutch government has said it will take ASML’s economic interests into account when deciding whether to tighten semiconductor export rules further.
Meanwhile, South Korean Trade Minister Cheong Inkyo reportedly said this week that the U.S. should offer more incentives if it wants Seoul to comply with additional export curbs on China’s semiconductors.
Beijing has long maintained that the U.S. and its allies’ chip restrictions are anti-competitive and hurt the global semiconductor supply chain.
Dado Ruvic | Reuters
Elon Musk’s SpaceX, is initiating a secondary share sale that would give the company a valuation of up to $800 billion, The Wall Street Journal reported Friday.
SpaceX is also telling some investors it will consider going public possibly around the end of next year, the report said.
At the elevated price, Musk’s aerospace and defense contractor would be valued above ChatGPT maker OpenAI, which wrapped up a share sale at a $500 billion valuation in October.
SpaceX has been investing heavily in reusable rockets, launch facilities and satellites, while competing for government contracts with newer space players, including Jeff Bezos‘ Blue Origin. SpaceX is far ahead, and operates the world’s largest network of satellites in low earth orbit through Starlink, which powers satellite internet services under the same brand name.
A SpaceX IPO would include its Starlink business, which the company previously considered spinning out.
Musk recently discussed whether SpaceX would go public during Tesla‘s annual shareholders meeting last month. Musk, who is the CEO of both companies, said he doesn’t love running publicly traded businesses, in part because they draw “spurious lawsuits,” and can “make it very difficult to operate effectively.”
However, Musk said during the meeting that he wanted to “try to figure out some way for Tesla shareholders to participate in SpaceX,” adding, “maybe at some point, SpaceX should become a public company despite all the downsides.”
WATCH: What retail investors should know about OpenAI and SpaceX
The logo for Google LLC is seen at the Google Store Chelsea in Manhattan, New York City, U.S., November 17, 2021.
Andrew Kelly | Reuters
A U.S. judge on Friday finalized his decision for the consequences Google will face for its search monopoly ruling, adding new details to the decided remedies.
Last year, Google was found to hold an illegal monopoly in its core market of internet search, and in September, U.S. District Judge Amit Mehta ruled against the most severe consequences that were proposed by the Department of Justice.
That included the proposal of a forced sale of Google’s Chrome browser, which provides data that helps the company’s advertising business deliver targeted ads. Alphabet shares popped 8% in extended trading as investors celebrated what they viewed as minimal consequences from a historic defeat last year in the landmark antitrust case.
Investors largely shrugged off the ruling as non-impactful to Google. However some told CNBC it’s still a bite that could “sting.”
Mehta on Friday issued additional details for his ruling in new filings.
“The age-old saying ‘the devil is in the details’ may not have been devised with the drafting of an antitrust remedies judgment in mind, but it sure does fit,” Mehta wrote in one of the Friday filings.
Google did not immediately respond to a request for comment. The company has previously said it will appeal the remedies.
In August 2024, Mehta ruled that Google violated Section 2 of the Sherman Act and held a monopoly in search and related advertising. The antitrust trial started in September 2023.
In his September decision, Mehta said the company would be able to make payments to preload products, but it could not have exclusive contracts that condition payments or licensing. Google was also ordered to loosen its hold on search data. Mehta in September also ruled that Google would have to make available certain search index data and user interaction data, though “not ads data.”
The DOJ had asked Google to stop the practice of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones.
The judge’s September ruling didn’t end the practice entirely — Mehta ruled out that Google couldn’t enter into exclusive deals, which was a win for the company. Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.
Mehta’s new details
In the Friday filings, Mehta wrote that Google cannot enter into any deal like the one it’s had with Apple “unless the agreement terminates no more than one year after the date it is entered.”
This includes deals involving generative artificial intelligence products, including any “application, software, service, feature, tool, functionality, or product” that involve or use genAI or large-language models, Mehta wrote.
GenAI “plays a significant role in these remedies,” Mehta wrote.
The judge also reiterated the web index data it will require Google to share with certain competitors.
Google has to share some of the raw search interaction data it uses to train its ranking and AI systems, but it does not have to share the actual algorithms — just the data that feeds them.” In September, Mehta said those data sets represent a “small fraction” of Google’s overall traffic, but argued the company’s models are trained on data that contributed to Google’s edge over competitors.
The company must make this data available to qualified competitors at least twice, one of the Friday filing states. Google must share that data in a “syndication license” model whose term will be five years from the date the license is signed, the filing states.
Mehta on Friday also included requirements on the makeup of a technical committee that will determine the firms Google must share its data with.
Committee “members shall be experts in some combination of software engineering, information retrieval, artificial intelligence, economics, behavioral science, and data privacy and data security,” the filing states.
The judge went on to say that no committee member can have a conflict of interest, such as having worked for Google or any of its competitors in the six months prior to or one year after serving in the role.
Google is also required to appoint an internal compliance officer that will be responsible “for administering Google’s antitrust compliance program and helping to ensure compliance with this Final Judgment,” per one of the filings. The company must also appoint a senior business executive “whom Google shall make available to update the Court on Google’s compliance at regular status conferences or as otherwise ordered.”
This is breaking news. Check back for updates.
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