4.1.1 “Hard” Governance in AI Infrastructure

Governments are increasingly securing AI semiconductor supply chains and restricting technology transfers for national security purposes, as well as promoting self-sufficiency, and economic development. Measures deployed include mandates for public investments in AI infrastructure (which will be discussed under “Investments in AI infrastructure”), and conditional local content requirements.¹⁰

Additionally, some countries have imposed export controls on advanced semiconductor equipment and high-performance AI chips, primarily on national security grounds. ¹¹ In some cases, these approaches have been expanded in order to address concerns around circumvention, where potentially intrusive chip tracking mechanisms have been explored. ¹² In addition, some countries have cited the illegal use of restricted technologies to justify broad bans on certain commercial semiconductors.¹³

_{10 For example, in the US and China}

_{11 Examples include controls on advanced lithography equipment from the Netherlands and Japan, the U.S. October 7, 2022 Export Administration}_{Regulations update, the U.S. AI diffusion rule, and Taiwan’s ban of exports to specific Chinese companies.}

_{12 The emergence of Deepseek raised concerns in the United States about circumvention of controlled semiconductors via third countries,}_{prompting the Commerce Department’s recommendations on diversion risks and legislative proposals like the Chip Security Bill, which could introduce chip tracking mechanisms.}

_{13 For instance, the U.S. has restricted use of Huawei Ascend AI semiconductors due to alleged illegal use of U.S.–origin technologies.}