Governments are increasingly regulating sensitive, multi-use artificial intelligence (AI) technologies for security and economic reasons. As Raj Varadarajan, Gary Wang, Michael McAdoo, and Marc Gilbert write for the Boston Consulting Group, companies that procure sensitive tech through global supply chains seem likely to face new regulations. These BCG analysts reported in 2023 that firms in AI, semiconductors, biotech, quantum computing, and such should be alert to the risk of regulatory changes. Subsequent events confirm their precautions.
Global competition and security concerns put advanced technology supply chains at risk.
Some of the world’s largest economies and political powers, including the United States, China, and the European Union (EU), are regulating their high-tech exports to protect their security and assert a competitive economic advantage. These regulatory policies may affect companies that rely on global supply chains to obtain the technologies, such as advanced semiconductors and AI, they need for commercial and military purposes.
In 2022, the US adopted regulations that limit Chinese companies’ access to high-end American AI designs and chips. Also in 2022, China’s President Xi Jinping announced plans to advance China’s semiconductor industry and to push forward in AI, biotechnology, and clean energy. The EU plans to pass legislation to increase the global market position of its semiconductor industry by a little less than 25%. More than $30 billion in combined private...
Raj Varadarajan is a managing director and senior partner at Boston Consulting Group (BCG), where Gary Wang is a former project leader, Michael McAdoo is a partner and director of Global Trade and Investment, and Marc Gilbert is a managing director and senior partner.
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