Joe Biden Plans to Limit AI Chip Exports to Indonesia, What Are the Impacts?

Kapanlagi.com - The President of the United States, Joe Biden, has just launched a move that has shocked the world: restrictions on the export of artificial intelligence (AI) chips. This policy is not just about trade, but rather a smart strategy in geopolitics to maintain US technological dominance. Indonesia is also not exempt from attention in this dynamic, as it is now trapped in a group of countries with limited access to cutting-edge technology.

Starting January 2025, Biden proposed rules that classify countries based on their relationship with the US and the potential risks to national security. Indonesia, along with several other Southeast Asian countries, falls into the Tier 2 category. This means there are certain quantity restrictions on the AI technology that can be accessed. Of course, this raises concerns among technology industry players.

Many observers see this move as a US strategy to dominate the global technology market while curbing the influence of other countries, especially China. However, the question now is: can Indonesia turn this challenge into an opportunity to strengthen its own technology industry? This article will discuss this policy in depth and reveal its impact on Indonesia. Let's take a look together!

1. Background of Biden's Policy

The latest policy regarding the export restrictions on AI chips by the United States is a strategic move that has drawn global attention, aimed at maintaining their technological dominance. In recent years, the US has implemented strict rules on the sale of advanced chips to certain countries, particularly China and Russia, to prevent potential misuse.

By categorizing countries into three tiers, Tier 1, which includes close allies such as the European Union, Canada, and Australia, receives full access, while Tier 2, including Indonesia, faces strict limitations with a maximum of 50,000 GPU units during the period from 2025 to 2027.

On the other hand, Tier 3, consisting of China and Russia, is entirely prohibited from importing these chips. This policy not only focuses on US national security but also aims to encourage innovation in allied countries. However, this move has the potential to disrupt global supply chains and significantly impact the economies of countries in Tier 2.

2. Industry Reactions and Their Impact

This controversial step has drawn sharp criticism from various circles, including technology giant Nvidia, which dominates 90% of the global AI chip market. In its statement, Nvidia assessed this new policy as a serious threat to economic growth and technological innovation, with export restrictions seen as a drastic change that could undermine the US's leadership position on the global stage.

Observers warn that these restrictions could potentially trigger a new trade war, especially with countries that are directly affected, such as Indonesia. According to Heru Sutadi, Executive Director of the ICT Institute, this is a new model of trade conflict focused on the information and communication technology sector. However, behind these challenges, there are bright opportunities.

Ian Yosef M. Edward, Chairman of the ITB Center for Telecommunications Policy and Regulation Studies, revealed that Indonesia has the opportunity to develop AI-based data centers, thanks to the good relationships established with the US.

3. Implications for Indonesia

Indonesia, which is now trapped in Tier 2, is facing challenges as well as opportunities amid the GPU quota restriction policy that only allows for 50,000 units. This forces the domestic technology industry to innovate in order to meet the ever-increasing demand for data centers.

According to Heru Sutadi, although the short-term impact may not be very noticeable, it is important to prepare for the possibility of stricter restrictions in the future. However, a harmonious relationship between Indonesia and the United States could be a valuable asset in overcoming these obstacles.

With a careful diplomatic strategy, Indonesia has the opportunity to advocate for broader access to cutting-edge technology from the land of Uncle Sam.

4. Global Response to US Policy

The AI chip restriction policy implemented by the US has drawn the attention of various countries around the world. Tier 1 countries like Japan and Taiwan welcome this move, as they can still enjoy full access to advanced technology from the US.

On the other hand, China and Russia, categorized as Tier 3, view this policy as a hegemonic strategy that could hinder their technological progress. Meanwhile, countries in Southeast Asia, including Indonesia, face more complex challenges.

With the limited GPU quota, they are required to innovate and find local solutions in order to remain competitive in the global technology arena.

5. The Future of Indonesia's Policies and Alternatives

Although this new policy will begin to be implemented in January 2025, its fate remains uncertain, depending on who occupies the next US presidency. If the incoming administration, like that led by Donald Trump, is more friendly to the business world, this policy may not last long.

However, amid this uncertainty, Indonesia has a golden opportunity to leap forward by developing local technology. With smart investments in data center and AI-based computing sectors, our country has the potential to become a technology giant in Southeast Asia, even while facing various challenges from US policies.

6. Why is the US restricting AI chip exports to Indonesia?

The United States is now taking decisive steps by restricting technology exports, a strategy aimed at maintaining innovation dominance and preventing potential misuse of artificial intelligence (AI) that could threaten national security.

7. What is the impact on the technology industry in Indonesia?

Indonesia is currently struggling to meet the growing demand for data center technology, although the impact of these challenges is expected to be minimal in the near term.

8. Are other countries also affected by this policy?

Countries like China and Russia are now stuck in Tier 3 with a total ban, while Indonesia and several other countries in Tier 2 must grapple with strict quota restrictions.

9. How can Indonesia overcome these restrictions?

Indonesia has a golden opportunity to strengthen diplomatic relations with the United States while simultaneously promoting the development of local technology. This move will not only reduce dependence on imports but also pave the way for greater innovation and self-sufficiency at home.

(kpl/srr)