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The Executive Order on Artificial Intelligence: Implications for the Semiconductor Industry

Shane Hunter

Shane Hunter | Partner View more articles

Shane is a member of our Patent Practice Group

On October 30, 2023, President Biden issued an Executive Order (EO) regarding Artificial Intelligence. The EO noted that availability of semiconductors is critical to implementing AI and laid out several mandates for the Secretary of Commerce to promote competition for semiconductor production in view of the CHIPS Act of 2022, which was meant to help ensure the availability of semiconductors for US companies. The mandates will help expedite the re-establishment of semiconductor production facilities (“fabs”).

The EO includes a number of provisions aimed at helping start-ups and small companies, including

  • funding for physical assets, such as specialty equipment or facilities, to which startups and small businesses may not otherwise have access;
  • technical and intellectual property assistance, that could accelerate commercialization of new technologies by startups and small businesses
  • possibly tying funding for commercial semiconductor R&D facilities to increased access for startups or small firms to the facility’s AI technologies
  • promoting Small Business AI Innovation and Commercialization Institutes
  • allocating up to $2 million in Growth Accelerator Fund Competition bonus prize funds for accelerators that support the incorporation or expansion of AI-related curricula, training, and technical assistance
  • considering SBA loans to support expenses by small businesses related to the adoption of AI.

In addition, the EO mandates mentorship programs for semiconductor industry workers (especially in underserved communities), increasing resources including funding, datasets for AI training, workforce development programs, design and process technology (including intellectual property), and technical and intellectual property assistance to accelerate commercialization and protect innovation.

As it has been decades since the vast majority of US semiconductor product moved overseas, institutional knowledge for running a semiconductor fab has been lost, especially given the advances in semiconductor fabrication that have occurred in the interim. The EO instructs the Secretary of Commerce to expedite the renewal of the necessary workforce, including the education of the workers to be able to operate a semiconductor fab according to present technology, and to innovate further developments in semiconductor fabrication technology.

The EO opens the door for numerous opportunities to support the return of semiconductor fabrication en masse to the US. For example, community outreach programs may be instituted to spur interest in our youth about the possibilities of careers in the semiconductor and microelectronics industries. Education programs will be needed to get a workforce trained for the numerous jobs required of a large-scale fabrication operation. Startups and small businesses will need help requesting funding, intellectual property assistance, and/or other resources from the Secretary of Commerce.

The Executive Order builds on the momentum, in the public sector and the private sector, of the CHIPS Act which we covered here. In the wake of the CHIPS Act, not only has the government received over 460 statements of interest seeking government funding, but the private sector has announced more than $166 Billion in semiconductor-related investments. The need for secure availability of semiconductors was laid bare by the Covid-19 pandemic, and the activity in the last two years to meet this need shows that there is a lot of work to be done, companies are moving quickly to fill the need, and the government and support services need to adapt and act quickly to expedite the resurgence of semiconductor production in the US to meet what is expected to be a $1 Trillion industry by 2030.

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