US Considers AI Chip Export Restrictions For China

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Bad news for Nvidia and AMD, as US considers tightening export controls to China of powerful AI chips and processors

The United States is considering tightening the export restrictions on China, in order to slow Beijing’s access to high-end artificial intelligence chips.

Reuters, citing two people familiar with the matter, reported that US officials are considering tightening an export control rule, by clamping down on the amount of computing power the export chips can have.

The possible tightening of the sweeping export control restrictions imposed by the Biden administration last October, has already severely restricted China’s semiconductor industry.

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Image credit: Tara Winstead/Pexels

Export restrictions

Those October restrictions made use of export controls first deployed against telecommunications equipment maker Huawei, but were applied more broadly to target the ability of mainland China to produce cutting-edge semiconductors.

Those restrictions also targetted China’s rapidly developing artificial intelligence industry and its ability to use cutting-edge technology such as supercomputers to develop military applications such as nuclear weapons or hypersonic missiles.

Now according to the Reuters report, the US may update those export restriction rules by late July, according to the two sources. However one source cautioned that such US actions involving China often get delayed.

The US Commerce department declined to comment to Reuters on the matter.

Nvidia, AMD impact

But if the US does follow through, it will result in an even bigger financial hit for the likes of Nvidia and AMD.

Nvidia CFO Colette Kress was quoted by Reuters as saying on Wednesday at an investors conference, “Over the long-term, restrictions prohibiting the sale of our data centre GPUs to China, if implemented, would result in a permanent loss of opportunities for US industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results.”

News of the possible US restrictions send shares in Nvidia and AMD down 2 percent on Tuesday.

Earlier this week the Chinese government in an article in a national mouthpiece had hailed the potential of artificial intelligence and vowed to push forward with the technology to drive economic regeneration.

That article appeared the same day that the head of China’s main internet regulator, the Cyberspace Administration of China (CAC), delivered a speech that also emphasised AI’s potentially broad impact while cautioning of the regulatory challenge it poses.