U.S. Must Control Chinese Access to Advanced AI Technology: Raimondo

U.S. technology is “more important than ever” to national security, Commerce Secretary Gina Raimondo said Saturday at the Reagan Defense Forum in California. Raimondo was the first Commerce secretary to address the conference, but said she won’t be the last. The U.S. is serious about blocking China and its military from buying computer chips with advanced AI capabilities, she added.

“Our national security rests upon our economic security,” Raimondo said. “You cannot be a strong nation that defends itself unless you have the most competitive economy in the world and an innovation engine that leads the world,” she said. The department “sits in the center” of the administration’s technology and innovation policy, Raimondo said. China is "the biggest threat we've ever had," she argued, noting "China is not our friend."

The administration has taken “a very aggressive, new innovative approach” to export controls, Raimondo said. Commerce recently unveiled a series of restrictions on the export of advanced chips to China, including those used for AI, she said. For the first time, the U.S. denied a country access “to a suite of semiconductors and equipment,” she said. “We’re going to continue to go in that direction,” she said.

Commerce has 100 staffers focused on semiconductors who didn’t work for the department when she took office, Raimondo said. “We’re building a more muscular Commerce Department to take on these challenges,” she said. “You will see that that’s here to stay,” she said.

The Bureau of Industry and Security needs more funding to do its job, Raimondo said, addressing members of Congress in the audience. BIS has an annual budget of $200 million. “That’s like the cost of a few fighter jets. Come on. If we’re serious, let’s go. Fund this operation like it needs to be funded.” The U.S. “can’t let China get these chips,” she said. AI chips in the wrong hands are “as deadly as any weapon that we can provide,” she said.

Raimondo acknowledged export controls aren’t popular with some companies. "I know there are CEOs of chip companies in this audience who were a little cranky with me” with new controls “because you're losing revenue,” she said: “Such is life. Protecting our national security matters more than short-term revenue."

Drawing the line on export controls is difficult, Raimondo admitted. “I don’t know if we’re perfect -- I don’t know if we can be perfect,” she said. “We need to have a constant dialogue with industry” and the Pentagon, she said.

Commerce knows that companies like Huawei help the Chinese military, so “we can’t sell things to them,” Raimondo said. But China works hard to get around restrictions, spinning off new companies not on the experts' controls list, she said. That’s why the U.S. needs countrywide controls, she said.

Raimondo warned U.S. companies against redesigning chips so they can get around national security restrictions. "That's not productive,” she said. "Newsflash -- democracy is good for your businesses,” she said. “Rule of law here and around the world is good for your businesses," she said.

Tech companies have always had a philosophy of “move fast and break things,” Raimondo said. “We can’t embrace that with AI -- it’s too dangerous.”

Raimondo said the department hopes to award the first of $39 billion in funding for semiconductor manufacturing under the 2022 CHIPS and Science Act by the end of the year. In addition, she promised a “stream of announcements” in the first half of 2024. “Commerce at the time the bill was passed” in 2022 (see 2208090062) “wasn’t built to do this job -- we’ve hired 110 people,” she said. “I’m going to be in the business of dishing out disappointment” because there’s “just not enough money” to fund all the projects proposed, she said.