In recent months, the trade war between the US and China has become a constant backdrop for tech companies on both sides to be wary of. The current situation shows that the US is concerned that China is having an increasing presence in global technology. The result of these deliberations is that the US Commerce Department intends to institute a rule, going into effect on January 6th, that requires any company wanting to export AI tech overseas to obtain a license to do so.
Sensitive Technology in Focus
The strong-arm trade and diplomatic tactics of the US have made it few friends abroad, and this legislation is the first in a series that seeks to limit the export of sensitive technology to countries that may be less than friendly with the US. The measure intends to stop these companies from copying existing US tech or locating security weaknesses inside that tech to benefit their own ends.
A Good and Bad Sign
The US had recently blacklisted a series of companies that local businesses were banned from doing business with. Among them was global telecommunications giant Huawei, the provider of some of the switching equipment for smaller 5G service providers around the country. Based on this initial measure, tech companies and infrastructure providers alike held their collective breath to see what new sanctions would come into effect this year.
Many smaller providers depend on Chinese tech as it is significantly cheaper than other global alternatives. The rules introduced by the Commerce Department come as a breath of fresh air for an industry bracing for further sanctions on providers of necessary equipment. Additionally, the ease with which the administration banned Huawei made it a real threat to the future of AI exports to the rest of the world. With the recent news about US-Iran tensions becoming more a current risk, the administration may likely move to continue to lock down the free availability of tech for export. The US’s technological advantage, should a war break out, could prove a crucial edge to winning a conflict.