US Bans NVIDIA From Exporting AI Chips to China and Russia

A new regulation that would limit the sale of computer chips needed for supercomputers and artificial intelligence to Russia and China has been proposed by the US government and is currently being implemented.

In a filing with the Securities and Exchange Commission, NVIDIA said that the government had informed it about the new license requirement impacting one of its current (A100) and one of its upcoming (H100) GPUs, which were made to accelerate machine learning workloads.

For Military Objectives

According to information provided by the government to NVIDIA, the new license stipulation will handle the possibility that Russia and China could use the impacted products for military objectives.

AI and machine learning are employed for a variety of purposes, such as the development of weaponry and surveillance, as explained by The New York Times.

"While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect US national security and foreign policy interests," a spokesperson for the US Department of Commerce told Reuters.

This new requirement comes after another export control regulation that was announced in mid-August and would prevent China from having access to some sophisticated chip design software required to create the next-generation processors.

This latest announcement also demonstrates a significant escalation of the US's crackdown on several technological abilities of China at a time when tensions are rising over Taiwan, which is responsible for producing chips for NVidia and almost every big chip company, as per Reuters.

How NVIDIA's Sales Might Be Impacted

Chinese firms won't be able to efficiently do the kind of advanced computation needed for image and speech recognition, among many other jobs, without US chips from companies such as Nvidia and AMD.

In its filing, NVIDIA acknowledged that the restriction might make it more difficult for the company to finish developing the H100 processor. Although it doesn't sell its goods in Russia, it anticipates sales to Chinese businesses will bring in about $400 million during the third fiscal quarter.

It might utilize that cash to fund the creation of new items in the future. If the Chinese market rejects the chipmaker's alternative products or if the government denies licenses to the company's top clients, all those potential revenues might be lost.

The chip restriction comes as Nvidia previously predicted last week that the current quarter will see a significant decline in sales due to a weaker gaming market. According to Nvidia, third-quarter sales should total $5.90 billion, a 17% decrease from last year's period.

This article is owned by Tech Times

Written by Joaquin Victor Tacla