The White House has imposed new restrictions in the name of national security, through the powerful Bureau of Industry and Security (BIS), responsible for establishing export controls, on chip sales to certain countries to which there are indications that they could be transferred. China the high technology contained in their integrated circuits.
The move is already controversial, say anonymous sources familiar with the BIS decision, who specifically name Saudi Arabia and the United Arab Emirates (UAE) as the first foreign markets in the spotlight. These countries have a strong appetite to attract foreign investment for their hubs of Big Data and Artificial Intelligence (AI) and for its close link with the BRICS + and more particularly with the Chinese theses which seek to wrest the technological, economic, military and geopolitical global scepter from the United States.
Commerce Ministry officials confirmed Bloomberg that this regulation has been in effect since August and that deliberations to incorporate new restrictions before the November 5 elections remain fluid. Always under the threat of safeguarding economic interests and national security and preventing the know how electronic chip companies fall into the hands of their great geostrategic enemy.
The BIS decision involves reconfiguring the foreign licensing system under its jurisdiction in semiconductors and artificial intelligence (AI) with control of the first maritime taxes to prevent Saudi and UAE data centers from collecting documents classified as top industrial secret.
In the meantime, it determines the final blacklist of foreign markets prohibited from acquiring AI chips made in the USA. Nvidia, industry leader, which achieved a double in July surprise to Apple and Microsoft by exceeding three thousand billion dollars in market capitalization – just 100 days after having recorded two thousand billion – the also Californian AMD (Advanced Micro Devices) and the historic company of the sector, Intel – all specialized in processors for AI – were affected by the restrictions.
The Biden-Trump clampdown on Chinese technology
The Biden administration had no qualms about holding the tech industry’s first rehearsal. decoupling of globalization. It has already demonstrated this in 2022, with the ban on its foreign sector from sending technological innovation products to the asian giant. In 2023, by vetoing the sale of electronic chips made in the USA. Or this summer, with the unprecedented increase in import duties on a wide range of Chinese products, intended to prevent the sale of their electric vehicles on the American market: the doubling of entry duties on the cars themselves , with unprecedented tolls on their batteries, rare minerals and chips.
North American diplomatic sources acknowledge that Biden’s initiatives attempt to ban crucial elements in the manufacturing of China’s competitive electric vehicle, from integrated circuits to software, and that they could raise these barriers to technical components sourced from both from the world’s second largest economy and of Russian origin due to their use in the preparation of automatic driving and communication systems in commercial vehicles.
Again, under the hackneyed argument that they could spy on behalf of Beijing or Moscow and in the interests of national security. Even if the instigator of these protectionist practices was his predecessor.
Donald Trump’s economic policy established the tariff battle with Beijing and formalized, in 2018, the first controls of its technological companies – from Huawei to ZTE, its telecommunications giant – on American territory. Now that he seeks a return to the Oval Office, “he continues to see enemies on all sides,” analysts say. Bloomberg after the Republican’s interview with his editor-in-chief, John Micklethwait, in which he attacks experts who risk transferring the costs of his aggressive trade policy to American consumers and businesses.
Trump’s strategy also triggered hostilities between the two superpowers for the technological throne, which have intensified in the midst of the race for AI hegemony and where chips play a leading role on the chessboard of the new world order . The White House does not hide its attempts to involve its European allies in the battle to make its commercial sabotage of China effective, even in companies with a particular geostrategic context such as 5G and 6G.
The Biden administration has given the embargo a new turn of the screw. To the point of contributing to the decline in the stock market shares of multinational potato chip companies. Both from Nvidia, which has not at all succeeded in its reign as the most valuable company on Wall Street, and from its American, European and global competitors. Because Washington’s veto triggered a strong reaction on the markets. Between last Tuesday and Wednesday, $420 billion was eroded from microchip companies around the world, including corrections in the United States, Europe and Asia.
Of course, that wasn’t the only factor. The main trigger for this debacle may have been the scale of the drop in chip orders from Dutch company ASML in the third quarter – from an expected 5.390 million euros to 2.6 billion – which caused a decline of 15.6% of their value. The largest in its 26-year history, a leak of more than $50 billion, the largest in Europe since 1998 and which led to it ceding its status as the largest European company by capitalization to the German department store of SAP software.
Chips and AI will create volatility in stock markets
The IMF, ahead of its fall summit, warned that “AI can make the market more efficient, but also more volatile” in the immediate future. In his diagnosis, which will appear in his report on financial stability, he leaves an eloquent double reading: “hedge fundsinvestment banks and other market companies […] “They use algorithms to streamline stock orders and market their assets more efficiently, but AI also helps precipitate adverse events that drive prices down over short periods of time.” Fear of serious destabilizing episodes and financial or corporate uncertainties will increase volatility and generate roller coasters in stock market valuations, he says.
He profit warning that the Dutch company ASML announced this week caused a sharp drop in its stock market value which dragged down other stocks in the sector. TSMC illustrates the whole part of the bottle that transformed chips into a stock market El Dorado. Faced with the loss of confidence of ASML investors, the Taiwanese company announces a net profit of 54% between July and September and its intention to create chip factories in Europe to supply its technology companies. TSMC is also Nvidia’s main component supplier.
The Taiwanese company is under pressure because it is among the beneficiaries of millionaire federal subsidies to the country’s industries. Concretely, it has already received $11.6 billion in guarantees, loans and direct aid since they came into force in 2023, and has started producing its A16 chips for Apple from its Phoenix factory.
But the empty part also exists and has to do with the warning of investment banks like Goldman Sachs who question the reality of a company, that of AI, capable of exploding global productivity and absorbing profit yield quotas that exceed one. billion dollars.
New geopolitical tensions
The White House National Security Council (NSC) admitted unofficially that its goals are to put an end to “the enormous potential for progress in AI of certain countries and their ambitious interests in hosting data centers” and that Nvidia and AMD have already suspended prices in more than 40 markets of the Middle East, Asia and Asia. Africa, to enter the “protective umbrella” of the US high-end chip industry, responsible for “mitigating emerging technological risks”. Tarun Chhabra, its chief innovation officer, was encouraged to acknowledge “conversations with multiple countries” aimed at reducing China’s “access capabilities” to cutting-edge US technology that it “could use in the field.” military “.
Data centers, in high demand for AI for its development, are the other major speculative niche, along with chips, that the IMF says it fears.
The United Arab Emirates and Saudi Arabia have taken technological leadership in the Middle East to reduce their heavy dependence on crude oil. But although they have chosen the United States as a major strategic partner, they have entered into separate agreements with China to develop value chains focused on Big Data and AI with the Asian giant’s technology; especially with Lenovo.
Former Google CEO Eric Schmidt’s warning that “the United States is not prepared to defend or compete in the AI era” with adversaries like China is once again no longer returned to the forefront in the Oval Office. Just like George Friedman of Geo Political Futures’ slogan that technology cycles drive geopolitical changes in the global order.
Although TSMC is also under Washington’s watch. To the detriment of the company’s revelation of the markets towards which its investments in Europe will be directed, the White House sets its sights on Hungary and Slovakia, which admit to negotiating energy projects and cooperation agreements with Russia and China. technological – the first, with Moscow, the second, with Beijing, to reduce, as they claim, their dependence on the internal market. Two of the Trojan horses of the Kremlin in the EU, they warn in Washington. For now, the Taiwanese multinational has landed its first European pike in Dresden.
