In a move aimed at maintaining dominance in the field of AI and addressing concerns about potential military applications, the U.S. is reportedly considering implementing new restrictions on the export of AI chips to China. As per a report from the Wall Street Journal, the U.S. Commerce Department may put restrictions on exports of AI chips made by NVIDIA, AMD, and other chip companies to customers in China as early as July.
U.S. AI chip export controls
U.S. officials are considering restricting and having an export control rule designed to slow the flow of AI chips to China by clamping down on the amount of computing power the chips can have, according to two people familiar with the matter. U.S. is considering new AI chip limits and the amount of computing power it will export to China.
The Biden administration last October issued a sweeping set of rules designed to freeze China’s semiconductor industry in place while the U.S. pours billions of dollars in subsidies into its own chip industry.
In update to U.S. computer chip export rules may come by late July, two sources said, but one cautioned that such U.S. actions involving China often get delayed. The U.S. Commerce Department declined to comment. NVIDIA (NVDA.O) Chief Financial Officer Colette Kress said on Wednesday at an investor’s conference, that if the United States imposes new export restrictions on the AI chips to China, it would result in a “permanent loss of opportunities” for US industry.
The Wall Street Journal on Tuesday reported that the US is planning new restrictions on exporting AI chips to China.
U.S. computer chip export rules implications
One of the U.S. export restrictions rule limits the sale of chips in China that can provide the computing power needed to create AI technologies similar to ChatGPT, a move that immediately impacted sales of products from NVIDIA Corp (NVDA.O) and Advanced Micro Devices Inc. (AMD.O), and would likely affect future offerings from Intel Corp (INTC.O).
The possible U.S. AI chip export rule tightening would hardest hit NVIDIA, whose strong position in the AI chip market helped make it worth $1 trillion earlier this year.
“We do not anticipate that such additional restrictions, if adopted, would have an immediate material impact on our financial results,” NVIDIA’s Kress said on Wednesday.
Questions have arisen about how effective the U.S. export restrictions of AI chips will be able to slow Chinese companies’ development of AI systems.
NVIDIA has made special chips for the Chinese market that comply with the October restrictions, but Reuters reported last month that major Chinese companies such as Tencent Holdings (0700.HK) plan to use NVIDIA’s export-compliant chips to cut the time it takes to train huge AI systems by more than half.
The current U.S. computer chip export rule involves two restrictions.
- Restriction focuses on how fast chips can communicate with each other, which is important because AI systems such as ChatGPT require thousands of chips to be chained together.
- Focuses on how much computing power the chip can have.
The H800 chip that NVIDIA created for the Chinese market, for example, has as much computing power at some settings used in AI work as the company’s chip for the rest of the world, but its chip-to-chip speeds are limited, according to a specification sheet seen by Reuters.
AMD as well as Intel declined to comment. Previously, AMD stated the change in rules will not have an impact on its financial results.
