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AI chip export controls on China underfunded: Raimondo

US Commerce Secretary Gina Raimondo said her department needs more money to stop China from catching up on cutting-edge semiconductors.

“We cannot let China get these chips. Period,” she said at the Reagan National Defense Forum in Simi Valley, California, on Saturday. “We’re going to deny them our most cutting-edge technology.”

To do that, Raimondo said the Commerce Department’s Bureau of Industry and Security, which manages export controls for the US, needs more funding from Congress.

“I have a $200 million budget. That’s like the cost of a few fighter jets. Come on,” she said. “If we’re serious, let’s go fund this operation like it needs to be funded.”

Raimondo said American companies will need to adapt to US national security priorities, including export controls that her department has placed on semiconductor exports.

“I know there are CEOs of chip companies in this audience who were a little cranky with me when I did that because you’re losing revenue,” she said. “Such is life. Protecting our national security matters more than short-term revenue.”

Raimondo called out Nvidia Corp., which designed chips specifically for the Chinese market after the US imposed its initial round of curbs in October 2022.

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” Raimondo said.

The Commerce Department updated the semiconductor curbs this fall to capture Nvidia’s made-for-China chips — and the company responded by designing three new AI components for the Asian country.

Communication with China can help stabilize ties between the two countries, but “on matters of national security, we’ve got to be eyes wide open about the threat,” she said.

“This is the biggest threat we’ve ever had and we need to meet the moment,” she said.

— With assistance from Mackenzie Hawkins

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