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US Is Planning New AI Chip Export Controls Aimed at Nvidia
(CTN News) – The Biden administration is reportedly set to introduce stricter export controls on selling certain artificial intelligence (AI) chips to China. This move is driven by concerns over providing technology to a strategic competitor.
The proposed changes by the US Commerce Department, expected to be announced in July, would make it more difficult to sell specific chips to China without obtaining a license. One chip that would be affected is Nvidia Corp.’s A800 chip, designed by the company after the previous export controls were implemented.
Impact on Nvidia:
Nvidia, a US-based technology company, has acknowledged the reports of tighter export restrictions. However, the company’s Chief Financial Officer, Colette Kress, stated that the strong overall demand for their products would ensure no significant impact on earnings if these rules were implemented.
China currently represents approximately 20% to 25% of Nvidia’s data center revenue, and any export ban to the country would be seen as a long-term loss of opportunity.
China’s Reaction:
The proposed tightening of export controls indicates the Biden administration’s efforts to curb China’s technological advancement. This move could potentially escalate tensions between the two countries.
The Chinese embassy spokesman, Liu Pengyu, referred to the US actions in the semiconductor industry as an example of a lack of respect, hindering discussions on other issues. Liu emphasized the need for mutual respect and productive communication between the US and China.
Future Developments:
The details regarding the announcement, such as potential extensions of general licenses granted to South Korean and Taiwanese companies, remain unclear.
Last October, Samsung Electronics, SK Hynix, and Taiwan Semiconductor Manufacturing Co. received a one-year reprieve from the restrictions and requested an extension from the White House. Whether these extensions will be granted is yet to be determined.
Conclusion:
The Biden administration’s plan to tighten export controls on AI chips to China reflects its aim to contain China’s technological progress. This decision has the potential to strain relations between the two countries further. Despite the anticipated restrictions, Nvidia, one of the companies likely to be affected by the new regulations, remains optimistic about its overall earnings. Implementing these rules will impact Nvidia’s revenue from China, and it could represent a missed opportunity in the long term.