In early August, the King of Bhutan, Jigme Khesar Namgyel Wangchuck, traveled from the mountains of the landlocked Asian nation to the headquarters of artificial intelligence chipmaker Nvidia in the flatlands of Silicon Valley.
King Wangchuck gave a two-hour tour during which Jay Puri, head of global business at NVIDIA, explained how Bhutan’s investments in data centers and NVIDIA chips combine with the kingdom’s largest natural resource, hydropower. I heard a discussion about whether new AI systems could be created.
This pitch was one of dozens that NVIDIA has made to kings, presidents, heads of state, and government ministers over the past two years. Many of these countries continued to pour billions of dollars into government efforts to build supercomputers and generative AI systems, hoping to gain a competitive foothold in technologies that could define this century.
But in Washington, officials worry that Nvidia’s expanding global sales could empower its opponents. The Biden administration is currently working on rules that would tighten controls over the sale of AI chips and turn them into diplomatic tools.
Under the proposed framework, U.S. allies would be free to make purchases, adversaries would be completely blocked, and other countries would The allocation will be based on alignment with the company’s strategic objectives. About them publicly.
The restrictions threaten Nvidia’s international expansion plans for what Chief Executive Jensen Huang calls “sovereign AI.” Mr. Huang has been flying around the world playing hopscotch this fall, logging more than 30,000 miles in three months, and the company expects to generate more than $10 billion in sales this year from countries outside the United States.
Now, interested buyers such as Saudi Arabia, Malaysia and Bhutan could be caught up in the battle for AI supremacy between the US and China. Buying Nvidia chips could require cooperation with approved U.S. and European cloud service providers and other assurances to the U.S. government that the technology will not be shared with China.
Mr. Hwang launched a last-minute lobbying campaign to have the rules repealed, but it may be too late.
“No administration has made it clear that unless Beijing changes its attitude and the way it operates on the world stage, the U.S.-China technology race will continue,” said Kron Kitchin, a nonresident senior fellow at the American Enterprise Institute. “I’m doing it,” he said. Focuses on national security and technology. “Companies like NVIDIA should expect the screws to be tightened.”
“This remarkable tsunami”
In 2019, Saša Ostojić, a former Nvidia executive from what is now Serbia, learned that his home country was considering installing AI chips from Chinese company Huawei to support local startups. He encouraged Serbian officials to visit Nvidia first.
Serbian leaders left Nvidia’s headquarters after convincing them that buying four Nvidia supercomputers, each costing about $500,000, would help accelerate their country’s technology industry.
Stefan Vaca, an adviser to the speaker of the Serbian parliament, said some Serbs had doubts about the investment. However, after the computers were received in 2021, the number of startups in Serbia increased from 200 to 800.
With the release of ChatGPT powered by OpenAI in late 2022, Serbia’s move seemed wise. The chatbot, which became an overnight sensation due to its artificial intelligence, has sparked interest in Nvidia’s AI chips, which control 90% of the market. One reason countries were so eager to get the chips, even though they were in short supply and difficult to buy, was that ChatGPT was not available in more than 20 countries, including Saudi Arabia and Vietnam. It was clear that if these companies needed AI technology, they would have to build it themselves.
Keith Strier, who previously worked at Nvidia and is now senior vice president of global AI markets, said, “The unintended consequences are making the community realize that this is a very important technology and they probably don’t want to rely on foreign sources.” It has spread,” he said. at rival chipmaker AMD. “That created this tsunami of interest.”
Capitals around the world are increasingly convinced that AI should be treated as a utility. Its perceived importance led officials to fear that if they did not invest in it, they risked falling behind their rivals economically and militarily. And many wanted to increase security by storing data within national borders where sensitive information could be protected.
In response to growing interest, Nvidia has set up a division to work with governments, Puri said in an interview. He and Mr. Strie met with foreign leaders to discuss their computing needs, and Mr. Huang stoked enthusiasm for investing in data centers powered by Nvidia chips.
This acquisition changed the way governments approach computing. Until recently, small countries primarily borrowed computing power from cloud computing giants such as Microsoft and Google. This eliminates the expense of software updates, engineering support, and semiconductor advances. Now they’re taking that job on themselves.
Denmark was also one of the countries rushed to contact NVIDIA. Peder Lundquist, chief executive of the Danish export and investment fund EIFO, said the country’s leaders first met with Huang in 2019 but did not feel there was an urgency to invest. After using ChatGPT, Danish leaders realized the power of the technology and contacted Nvidia to buy the chip, he said.
EIFO and the Novo Nordisk Foundation, a Danish non-profit organization focused on research, have partnered to invest $100 million in the supercomputer. The aircraft, unveiled in October after six months of construction, is equipped with 1,528 AI chips and weighs more than 30 tons.
“We have to innovate and make strong connections between applied research and business,” Lundquist said. “Supercomputing power is very important for good performance.”
AI diplomacy
As countries line up to buy Nvidia chips, the Biden administration has passed rules to monitor the company’s sales. Some fear that countries with ties to China, which has a goal of becoming the world’s AI leader by 2030, could provide access to Nvidia chips to Chinese researchers and companies. The state required the purchaser to obtain a license.
The United Arab Emirates was one of the first countries to seek a license. It wanted to allocate $100 billion for AI investments in 2022 and build the region’s fastest supercomputer.
U.S. officials sensed an opportunity. The company has struggled for nearly a decade to persuade countries to stop using Huawei, even after warning of cybersecurity risks and its ties to the Chinese Communist Party.
Licensing requirements provided a new solution in the form of Nvidia chips.
As part of a deal that allows it to use many of Nvidia’s cutting-edge chips, Emirates’ AI giant G42 has pledged to abandon its use of Huawei technology. In October, it unveiled a $30 million supercomputer powered by Nvidia chips.
Over the summer, White House officials from the Department of National Security and the Department of Commerce began telling semiconductor industry executives that they were developing a new AI policy, according to two people familiar with the discussions. It is said that Government officials said the current approval process for Emirates and other countries is cumbersome. They wanted to introduce rules that would make it easier to build AI data centers overseas while improving the ability to track chips and prevent them from being diverted to China.
It also hoped to make it easier for countries like the Emirates to buy Nvidia chips by replacing the licensing process with a bulk approval system that would allow sales to countries up to pre-set limits.
Draft rules began circulating among tip lobbyists this month. The limit will speed up approvals for data centers built by cloud computing providers in the U.S. and Europe, capping the number of chips in the hundreds of thousands. But for companies in other countries, the process is slower and subject to greater scrutiny.
Nvidia general counsel Juan Teter and Tim Teter called Biden administration officials and told them the rule would hurt the company, three people familiar with the call said. Other industry participants expressed similar concerns.
“We fully support national security and are happy to provide any information the government needs to inform policy,” Nvidia spokesman Ken Brown said in a statement. He added: “Imposing caps on mainstream data center products would be a major shift in approach, and while it would not reduce the risk of abuse, it would threaten economic growth.”
The Commerce Department declined to comment.
The rules are expected to be announced in the coming weeks, the people said, and Hwang is in contact with officials close to the incoming Trump administration in hopes of potentially rescinding the rules in January.
Gregory C. Allen, director of the Wadhwani AI Center at the Center for Strategic and International Studies, said it is unclear how the Trump administration will respond to the policy. But Republican leaders in the House and Senate have attacked the Biden administration’s past regulations on chip technology and China as too weak.
“We’re in an AI race with China, and we don’t want U.S. companies offering their competitors Gatorade and Nike shoes,” Allen said. “We want them on our side, and exclusively on our side.” New York Times
