When the U.S. introduced the AI Diffusion Framework earlier this year, it took the world by surprise. It was an extremely escalatory policy intrument where the U.S. wielded its control of what its companies as well as foreign companies did with the AI chips they bought or made. Looking back, it was conceivable that the Biden administration was lumbering to this position since years. It still represented a major shift in the way America perceives itself and its adversaries. It also showed that in the world of technology geopolitis, only capabilities are respected.
A few months later, the Trump administration has repealed the framework. Unsurprisingly, the reasons stated are about innovation and diplomatic relations. Yet, the same thinking remains, in other forms. I suspect that we haven’t seen the last of such framework for AI control by the US.
My colleagues and I have written a short issue brief about the implications of this move.
From the brief:
India was unfavourably placed in tier 2 of the AI Diffusion Framework. This placement meant that there were some thresholds on the number of AI chips that India could procure. However, the hard caps on the number of chips were far higher than the current demand in the Indian compute ecosystem. In other words, India could have gotten all the chips it wanted in the next few years under the framework.
Additionally, the framework had many second-order effects against Indian prerogatives. The framework would have undermined India’s goal of maintaining a level of strategic autonomy in its technology ecosystem. The possibility of Indian Global Capability Centres (GCCs) being denied access to advanced AI chips as country thresholds were reached or having to seek authorisations for purchasing chips is not an ideal situation. This could have led to tier 1 countries becoming the favoured destination for building cutting-edge technologies over tier 2 countries. These constraints would have led to a loss of talent and investment from India to tier 1 countries.
Given these realities, the government’s emphasis on building sovereign compute via GPU procurement warrants reconsideration. Indian companies are now free to procure all the chips they need, and the government could focus on other priorities. Union Minister of Electronics and IT, Ashwani Vaishnaw’s, recent comments about Indian efforts towards developing indigenous GPUs by 2029 could be seen as a response to US attempts at maximising control of the technology.
Despite the repeal of the framework, it is clear that this is an era of export controls for AI chips. The geopolitical climate will undoubtedly continue to dictate the ebb and flow of AI chip access. In its aspirations for strategic autonomy, India has a reason to develop a baseline capability in making its own advanced AI chip ecosystem. However, India is heavily reliant on foreign-made software and machinery. This makes the prospect of India rapidly developing these capabilities on its own highly unlikely. The extent to which the US and its allies will help India in this regard will not only depend on India-US relations but also India’s own position in the AI value chain.
Read more at: takshashila.org.in/blogs/us-ai-diffusion-framework-repealed
