Israel is facing imminent restrictions on graphic chip imports from the United States due to stricter regulations on technology transfer to China.
The new demands, created under the Biden Administration, would require prior US government approval for a permit to import advanced GPUs, such as those produced by Nvidia, Intel and AMD.
This means limits on graphics processor imports until 2027.
Removal of the restrictions is still under negotiation between Israel and the United States – but the Trump Administration may choose to include an agreement as part of a broader Middle East peace deal.
The regulations mandate that tech giants keep a substantial portion of their graphics processors within the US and limit deployment in any single foreign country.
This has prompted a concern that Israeli AI entrepreneurs might relocate to less restrictive environments.
Prime Minister Netanyahu discussed the import restrictions with Commerce Secretary Howard Lutnick at a closed forum during his recent visit to Washington DC in the Commerce Department’s “Committee on Industry and Security” (which previously blacklisted Israeli firms NSO and Candiru).
Netanyahu subsequently expressed optimism about removal of the restrictions, but the Trump administration has since downplayed those expectations.
At present, it appears likely the US will require concessions from Israel before lifting the restrictions, according to an analysis by the Globes business news outlet.
Israel is currently classified in an intermediate category under US export regulations, as are some 120 other countries, including Singapore and Saudi Arabia. Eighteen other US allies are exempt from the new rules, including Australia, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Republic of Korea, Spain, Sweden, Taiwan and the United Kingdom.
Israel’s tech industry, known for its contributions to AI advancements, may face delays in projects requiring high-performance GPUs as a result. The controls could also affect sectors such as cybersecurity, healthcare, and autonomous systems, where AI development plays a critical role.
While most Israeli entities may not need import licenses due to a minimum quantity threshold, the restrictions could discourage US tech giants like Nvidia, Amazon, Microsoft, and Google from establishing data centers in Israel, giving preferential treatment to exempt countries.
All of the above have R&D centers in the Jewish State.
US Senator Ted Cruz has criticized the regulations, which were created without Congressional and industry input.
Israel’s Defense Ministry is preparing for the impact of the new restrictions, accelerating procurements and acknowledging their potential effect on defense independence.
Israel’s inclusion in the restricted category is likely linked to the absence of stronger regulations preventing technology leakage to US rivals like China and Russia, Globes reported.
A “Trusted Technology” agreement between the US and Israel proposed in 2021 and which aims to address data security, export controls, and investment monitoring, remains unsigned.
