Last week, U.S. tech company Nvidia made a remarkable announcement. Its new server architecture relies on a recirculating coolant system, reducing water intake to near-zero.
This innovation addresses one of the biggest concerns opponents have raised about data centers, namely the effect on local water systems. And Nvidia is hardly alone; the newest Microsoft data centers use 90% less water than their earliest models.
The lesson? American tech is never static. When new technologies bring undesirable side-effects, the best solutions frequently emerge from the next round of innovation, not from regulation.
There’s a critical national security corollary to that message: America wins when it unleashes innovation. So it’s hardly surprising that China has been staging influence campaigns to stall data center construction and set back U.S. AI tech development.
China understands that the AI race may be the most important front in its quiet cold war with the U.S. China seeks to win the AI battle. The slower our rollout, the better its chances.
Thankfully, American dynamism has, can, and will continue to outpace Chinese roadblocks unless misdirected public opinion and unwise regulation get in its way.
China knows that a fearful American citizenry and bureaucratic red tape are far more potent and leave far fewer Chinese fingerprints than does direct intervention. When Meta tried to purchase the Chinese AI startup Manus, for example, Beijing stepped in and forced them to unwind the deal. That created more bad press focused on Chinese heavy-handedness than Beijing likes. Far better to convince Americans to hamstring our own industrial development than to reveal yourself as the heavy.
Though China sees itself — and is often portrayed — as a tech titan at least on par with the U.S., its innovation ecosystem lags far behind. To fill the gap, China relies heavily on corporate espionage, intellectual property theft, and state subsidies.
If Washington wants to protect itself from malign Chinese influence and expansion, a fair global market is its best bet. When the competition is even, America will come out ahead.
Pushing back against Chinese efforts to hobble American tech, like the anti-data center influence operations, is one important front. Encouraging innovation that can overcome obstacles like data center water usage is another.
Avoiding misregulation is a third. It’s imperative that we stop enacting measures that impede our emerging dominance. America wins when other countries become reliant on U.S. technology. Export controls — limiting who can buy and use our technology — have their place, but they must be deployed with caution.
Take the Remote Access Security Act (RASA), an audacious new bill that would extend existing export controls over certain AI infrastructure, notably cloud computing used to train AI systems.
Limiting the ability of our adversaries to access our cutting-edge technology is hardly a bad idea in theory. In practice, however, it must be approached with caution — balancing our desire to limit adversarial capabilities against our deeper desire to control central bottlenecks of the emerging AI tech architecture.
It’s unclear whether RASA, as currently drafted, gets that balance right. Narrowly tailored export controls are one thing. Broad controls are another. Many critics have raised concerns about the limiting consequences of RASA’s controls.
Cut China out too broadly, and the outcome is easily predictable: A complete Chinese-controlled architecture competing with our own. Each company and country will then have to choose — and a potential American customer lost to a Chinese architecture firm will be lost for years or decades.
Good export controls focus on stopping dangerous uses of technology. RASA appears to risk shutting out legitimate global customers — the very customers America wants reliant on American technology rather than on China's.
Overly restrictive export controls surrender America’s greatest economic advantage. America benefits when the rest of the world relies on American technology. That's how we create jobs, set standards, and keep China from becoming the world's default technology provider.
Like much well-intentioned legislation, RASA was drafted to solve a problem — but then focused too myopically on that problem. For RASA, it was cloud computing and AI. RASA pays far too little attention to the numerous other parts of the AI ecosystem through which its effects will ripple.
Furthermore, the AI-driven tech market is adapting and evolving quickly.
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