The Biden administration restricts high-end chip exports to China, a marketplace for AI at the DOD, and more discontent over JADC2’s rollout

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Worth Knowing

A New At-Home AI Tool Generates Art (and Concerns): Last month, Stability AI released Stable Diffusion, a free, open-source, AI-powered, text-to-image generator. It is not the first text-to-image AI — if you’ve been on the internet in the last six months, you’ve likely seen dozens of user-generated images from OpenAI’s DALL-E, Craiyon (formerly DALL-E mini), or one of the many other art-generating systems — but Stable Diffusion is especially notable because its relatively small size, low computing-power demands, and open-source code and weights mean it can be run at home on relatively cheap off-the-shelf hardware. While training Stable Diffusion took more than 250 high-end GPUs about a month (costing approximately $600,000), the model’s weights occupy only 4.2 GB, and optimized versions of the model can even run on years-old consumer GPUs. That level of accessibility has led to a burst of creativity, with dozens of robust online communities popping up to share user-generated artwork or particularly fruitful text prompts — but it has also caused significant concerns about misuse. Stable Diffusion comes with a safety filter that blocks offensive images and an innovative new “Creative ML OpenRAIL-M license” that prohibits certain nefarious uses, but enforcement could be a struggle due to the tool’s open status. Versions of the tool without the filter were quickly built and released, and users began sharing Stable Diffusion-generated pornographic images (some portraying real persons) on sites like 4chan and Reddit. All of this could be an ominous sign for the future of AI development — with text-to-video systems likely coming down the pike in the near future, observers worry that the protections in place may be insufficient to stem the onslaught of malicious content that users would be able to create with a video equivalent of Stable Diffusion.          
Government Updates

The U.S. Government Restricts High-End Chip Exports to China and Russia: The Biden administration has reportedly moved to place controls on exports of high-end, U.S.-designed semiconductors to China and Russia. The news broke last week after Nvidia disclosed the restrictions in an SEC filing, which said that the government had imposed restrictions on future exports of its A100 and H100 chips — both datacenter chips used in high-end AI applications — as well as any future chips that meet or exceed the A100’s performance. Santa Clara-based AMD confirmed that the new restrictions would impact its high-end MI250 as well. Nvidia’s SEC filing said the U.S. government had said the restrictions were being imposed due to concerns about the chips being used in or diverted to a “military end use” or “military end user.” Nvidia later confirmed, however, that it will be allowed to continue any exports needed to service existing U.S. A100 customers through March 1, 2023, and that it can continue with any exports, reexports and in-country transfers necessary to develop H100 chips. In a June policy brief, CSET researchers showed the Chinese military’s efforts to acquire cutting-edge U.S.-designed chips, including Nvidia products, through various intermediary distributors. A Reuters report similarly found that Chinese universities had spent millions of dollars on A100 chips in recent years. While U.S. companies will still be able to sell less-powerful chips in the Chinese market (and may still be able to sell some more powerful chips subject to licensing approval), the restrictions could mean a major hit to their bottom lines — Nvidia said up to $400 million in forecasted quarterly sales could be impacted by the restrictions.  

The White House Releases Its CHIPS Act Implementation Strategy: On Tuesday, the Commerce Department released its implementation plan for doling out the $50 billion in funds appropriated by the recently enacted CHIPS and Science Act. Of those funds, $39 billion will be spent to expand domestic semiconductor manufacturing (approximately $28 billion for “leading-edge” chips and the rest for “mature and current-generation” chips), and $11 billion will go to establishing several NIST-led R&D centers, institutes and programs. The newly released plan lays out four strategic aims: to invest in domestic manufacturing of “strategically important” chips, to maintain a supply of the older and current-generation chips needed for national security and other critical purposes, to grow U.S. semiconductor R&D efforts, and to build a diverse semiconductor workforce. According to Commerce Secretary Gina Raimondo, the department plans to begin taking applications for funding from chipmakers by February 2023 and aims to begin distributing funds soon after.

The Pentagon’s Chief AI Office Looks for Feedback on Its AI Marketplace: The Chief Digital and Artificial Intelligence Office plans to launch an AI-focused, rapid-acquisition marketplace in the first quarter of FY 2023 and is currently seeking comments about how best to achieve the marketplace’s objectives. According to a “teaser” document published by the CDAO and the contracted marketplace manager, IN3, the “Tradewind Solutions Marketplace” will be a “digital environment of competed video pitches” where contractors can showcase their AI, ML and data-relevant tools. Because all the video pitches must be assessed and vetted before they are made visible, the CDAO hopes the marketplace will streamline the process of AI-tool procurement by providing a one-stop shop of awardable products for interested DOD customers. It also hopes that the marketplace will offer a way for small and “nontraditional” contractors without existing Pentagon relationships to reach DOD customers. At launch, the marketplace will seek pitches related to six “Initial Strategic Focus Areas” — “Improving situational awareness and decision-making,” “Increasing safety of operating equipment,” “Implementing predictive maintenance and supply,” “Streamlining business processes,” “Assuring Cybersecurity,” and “Discovering Blue Sky Technology Applications” — though the CDAO says it expects these to evolve over time. The office will receive comments on the marketplace through the Tradewind website until September 30.  

JADC2 Implementation Continues to Generate Discontent at the Top: Deputy Secretary of Defense Kathleen Hicks expressed displeasure last month with the implementation of the Joint All Domain Command and Control strategy and has reportedly tapped Chief Digital and AI Officer Craig Martell to provide greater oversight. JADC2, the Pentagon’s plan to connect and coordinate its services’ sensors in a single network, has been a popular target of criticism recently. As we covered last month, several senior Pentagon officials raised concerns about a lack of alignment between the services on JADC2’s implementation. Those concerns appear to be echoed, at least in part, at the top — in comments to the press last month, Hicks said that while the prospect of JADC2 is promising, neither she nor Defense Secretary Lloyd Austin is satisfied with where it stands at present. Last week, Secretary of the Air Force Frank Kendall said Hicks had tapped three senior DOD officials — CDAO head Craig Martell, Undersecretary of Defense for Acquisition and Sustainment William LaPlante and Chief Information Officer John Sherman — to “pull all this together and help organize it.”   

In Translation
CSET’s translations of significant foreign language documents on AI

PRC Climate Adaptation Strategy: National Climate Change Adaptation Strategy 2035. This document is China’s climate change adaptation strategy for the period 2022–2035. It replaces an earlier strategy that covered the years 2013–2020. This new strategy aims to make China’s society and economy more resilient in the face of climate change through better monitoring and prediction of extreme weather; more resilient crops, farmland, and waterways; and other measures. The strategy is designed to complement China’s ongoing efforts to mitigate climate change by reducing greenhouse gas emissions.  

PRC Tech Innovation Plan: Action Plan for Improving the Technological Capabilities of Enterprises (2022-2023). This document is a Chinese government plan for making Chinese tech companies more innovative. Among other things, the plan proposes a number of measures to improve private companies’ integration with China’s state-run science and technology innovation ecosystem and proposes a few novel approaches toward financing Chinese tech startups.

If you have a foreign-language document related to security and emerging technologies that you’d like translated into English, CSET may be able to help! Click here for details.

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Article: A Comparative Analysis of the Definitions of Autonomous Weapons Systems, Mariarosaria Taddeo and Alexander Blanchard, Science and Engineering Ethics (August 2022)

Article: The Chips Are Down: Putin Scrambles for High-tech Parts as His Arsenal Goes up in Smoke, Zoya Sheftalovich and Laurens Cerulus, Politico (September 2022) 

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