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Panelists Call for Tighter Chip Controls, Caution Around Quantum

The U.S. may need to take stronger export control actions to stifle Chinese progress in artificial intelligence, including broader semiconductor-related restrictions, a U.S. congressional commission heard this week. But the commission was also warned about the dangers of overly broad controls on more emerging technologies, such as quantum, which experts said could hurt instead of help U.S. competition with China.

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Jacob Stokes, a senior fellow with the Center for a New American Security, said the U.S. needs to take “bold action to constrain China’s progress” in AI, but do it in a “narrow way that avoids self-defeating steps.” Speaking during a Feb. 1 hearing by the U.S.-China Economic and Security Review Commission, Stokes said he supports the Biden administration’s recently updated chip export controls (see 2310170055) but told the commission the rules have loopholes.

“There's still a black and gray market around them,” Stokes said, adding that Chinese companies can still access restricted chips through cloud computing services and use those chips to power advanced AI technologies. “Someone described them as leaky. I think that's a good way to think about them.”

Commerce Department officials have said they are searching for ways to restrict China from using those cloud services to access export-controlled technology (see 2401260051 and 2312080048), and the agency introduced a rule last month that could impose new customer due diligence requirements on cloud providers (see 2401290015).

Stokes suggested that rule is a good first step, but more may be needed. “I think it's really about opening up the aperture,” he said. “We're going to have to think about” those steps “across the full spectrum of the ingredients for AI.”

He also said the administration’s chip controls issued last year “were the right level of boldness in many ways” and helped to “cut the feet out from under China's domestic semiconductor manufacturing capability” for high-end semiconductors. But Stokes also said the U.S. likely didn’t impose as strong controls as it may have wanted to because it needed to convince the Netherlands and Japan -- two key players in the global chip-making equipment supply chain -- to adopt similar restrictions.

“They were limited, in part, because we needed to bring allies and partners on board,” Stokes said. “We're always going to have to, I think, strike a balance there.”

The U.S. should take a slightly different approach to potential export controls for the American quantum technology industry, which would benefit more from government funding rather than trade restrictions, said Edward Parker, a physical scientist with Rand Corp. He told the commission that broad quantum controls would slow scientific progress and risk “stifling a nascent commercial industry.”

He said the quantum sector can manage narrow, targeted restrictions on Chinese organizations researching the technology, pointing to Commerce's placement of Chinese quantum companies on the Entity List (see 2111240014). But Congress should “carefully consider the impacts” of any broader controls unless they are “directly tied to a concrete military capability,” Parker said.

And while there are no current, broad U.S. export controls over quantum technologies, there are some restrictions on the Commerce Control List that could “plausibly apply to quantum sensors,” Parker said. He said Commerce controls on certain magnetometers might also apply to “quantum magnetometers,” and told the commission that those restrictions may need a clarification.

“I think that if the United States decides to impose export controls on some of the more mature technologies, it would be useful to update those export controls -- which may or may not apply. It's a bit of a gray area, because they were crafted before the current technologies became more mature,” he said. “So it could well be an area that could just use a little updating and clarifying.”

Parker also touched briefly on the U.S. effort to block outbound investments in China’s quantum technology industry, which he said the industry is less concerned about than export controls (see 2401300081 and 2401180067). That’s mostly because he’s not “aware of any U.S. firms” investing in Chinese quantum technology companies or “considering doing so.” He also said private firms have “a relatively small role” in China's quantum technology sector.

"I suspect that the executive order will have little impact on Chinese quantum [research and development] efforts in the near term," he said.