The new chips license restrictions are expected to be a setback for the advanced AI work carried out by the Chinese firms.
American chipmakers NVIDIA and Advanced Micro Devices have been instructed by the U.S. government to stop selling certain high-performance chips that can be used for artificial intelligence to China.
According to a regulatory filing by NVIDIA, the Biden government imposed a new license requirement for any future export to China, including Hong Kong, and Russia for the company’s A100 chips, forthcoming flagship H100 chips and any future NVIDIA integrated circuit, performance of which equals or exceeds that of the A100.
“The USG indicated that the new license requirement will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China and Russia. The Company does not sell products to customers in Russia,” NVIDIA said, adding that the move would cost up to $400 million (nearly Rs. 3,200 crore) in its potential sales to China and will affect the company’s business in the Asian country.
On the other hand, the new license rules will affect AMD’s MI250 artificial intelligence chips but the company’s MI100 chips will not be affected, according to a Reuters report. NVIDIA’s rival does not believe the new rules will have a material impact on its business, the report added.
The new license restrictions are expected to be a setback for the advanced AI work, including image and speech recognition, carried out by the Chinese firms. The recent move is also an addition to the U.S. crackdown on Chinese firms and comes amid escalating tensions between the two major world economies on Taiwan, which dominates the world supply of semiconductors. Previously in 2020, former U.S. President Donald Trump banned chip supplies to Chinese tech giant Huawei without a special license.
Last month, U.S. President Joe Biden signed the landmark $280 billion bipartisan bill to boost domestic semiconductor production and to make the world’s largest economy more competitive with China.