Export Controlled Chips Should Have Compliance Features Built In, Researchers Say

The U.S. should push for export controlled semiconductors to be installed with a mechanism that would automatically bar those chips from being used in ways that violate U.S. export restrictions, researchers said in a new report this week. They said this would significantly aid export enforcement efforts and could potentially allow compliant chip companies to sell to a broader range of customers.

The Jan. 8 report, authored by researchers with the Center for a New American Security and the Institute for AI Policy and Strategy, calls on the U.S. to introduce “on-chip governance mechanisms” -- physical devices built directly into the semiconductor that would only allow the chip to be used in situations that comply with export controls or the terms of an export license. This could automatically restrict U.S. export controlled chips from being used to circumvent the Biden administration's China-related chip controls, the report said.

The researchers proposed placing these mechanisms on “all high-performance data center” artificial intelligence chips, which would ensure the semiconductor has “valid, up-to-date firmware and software and, where applicable, an up-to-date operating license,” which could include the terms of a chip manufacturer’s export license. “If these conditions are not met,” the report said, “it would block the chip from operating.”

On-chip governance has several security purposes, but export control enforcement is an “especially promising near-term application” of the idea, the report said. “Implemented well, this would greatly aid enforcement, and reduce the need for top-down export controls that harm the competitiveness of the U.S. chip industry, instead enabling more surgical end-use/end-user-focused controls if desired.”

The report said the White House should issue an executive order to create a working group, led by the National Institute of Standards and Technology, that would be tasked with “getting on-chip governance mechanisms built into all export-controlled data center AI chips.” Although some semiconductor firms, such as AMD, Apple, Intel and Nvidia, already sell chips with “many” of the features needed for on-chip governance, they said, the effort would only be possible with “long-term collaboration between government and industry.”

The researchers said their proposals could take time to implement. “Months in the most optimistic case, years in the most likely case,” the report said. But the Commerce Department could incentivize American chip designers by promising them special access to export markets, or other export benefits, if their products use a “specific set” of on-chip governance security features. These incentives could include relaxing the presumption of denial licensing review policy for certain exports to “lower-risk customers” in China, the researchers said, or “moving toward more surgical end-use or end-user-based controls.”

“Such commitments would be an effective way of incentivizing the necessary [research and development] without spending public money, given the large amount of lost revenue to chip firms caused by export restrictions,” the report said.

It also said Commerce and DHS should team to test the security features of chips with some of these newly incorporated safety and compliance features by granting a broader range of export licenses. By “flexibly” granting export licenses to China, the report said, Commerce can test whether the chips will be able to comply with export restrictions in “challenging operating contexts.” DHS can then deploy “bug bounty programs” to hunt down chips with any “security vulnerabilities.”

The researchers also noted that the U.S. would need to coordinate this effort with allies, especially Taiwan, the Netherlands, South Korea and Japan. But because there are so few nations involved in the supply chain for advanced AI chips, the report said “only a small number of countries would need to coordinate to ensure that all cutting-edge AI chips have these mechanisms built in.”

The Bureau of Industry and Security and other parts of the government may already be considering on-chip governance. The report noted that BIS, in its updated chip export controls released last year (see 2310170055), requested public comments on the idea of “hardware-based technical solutions” that would prevent certain chips from being used to train “large dual-use AI foundation models with capabilities of concern.”

The researchers said the U.S. should get started on this effort as soon as possible, adding that if national security risks of AI systems continue to grow at their current pace, “the need for highly effective controls could become acute in several years. This suggests that policymakers concerned about this issue should begin formulating policies and incentivizing the development of appropriate technologies now.”