Tech geopolitics hit a fever pitch over the last couple of months. The Biden administration introduced graded restrictions on the export of AI chips and models, tightened the screws on semiconductor manufacturing company TSMC for producing China-designed chips, added 25 Chinese companies to the Entity List, and imposed a ban on Chinese Connected Car Technologies.
Not to be outdone, China added a few American companies to its Unreliable Entity List and indicated an expansion of its export controls. Further, multiple news reports confirmed that China has been blocking the export of Tunnel Boring Machines to India and preventing the transfer of Foxconn’s precision equipment and Chinese engineers to its India offices. To cap it with a role reversal, China is now considering anti-dumping duties on legacy chips imported from the US. Though these developments are a part of the US-China great power competition, they remind countries like India that heavy reliance on proprietary technologies from a few countries carries the risk of getting caught in the US-China crossfire.
Take the case of AI, where we have arrived at a new normal characterised by escalatory technology denials. Of particular significance to India was the US Bureau of Industry and Security’s AI compute rationing rules, subtly labelled as Framework For Artificial Intelligence Diffusion. These rules are meant to restrict and slow down AI diffusion (models and advanced integrated circuits) while maintaining the US edge in AI. In a throwback to the Cold War, the framework divided the world into three tiers: the US and 18 other close allies in tier 1, adversaries such as Russia, China, North Korea, and Iran in tier 3, and the rest of the world including India and other developing states in tier 2.
