- The federal government is weighing further restrictions on exporting powerful computing chips to China, the kind that power AI models, The Wall Street Journal reported.
- The restrictions would impact Nvidia and AMD, both of which make powerful processors used in A.I. applications.
- The Biden administration has already tightened controls, forcing Nvidia to create a weaker version of its flagship A100 for China, but even that weakened chip wouldn’t be allowed under the rules under consideration.
Shares of Nvidia and Advanced Micro Devices both fell more than 2% in early trading after The Wall Street Journal reported the federal government is weighing new restrictions on exports of sophisticated chips used in artificial intelligence computing to China.
Shares of Nvidia closed down 1.8% Wednesday. AMD shares pared back earlier losses to trade slightly negative by the end of the day.
The export restrictions under consideration would be imposed by the Commerce Department and would come after the U.S. government already limited the computing power of chips made for Chinese use. Nvidia and AMD had been impacted by the prior limitation.
Nvidia responded to the earlier restrictions by building a lower-spec chip for the Chinese market. But under the new controls being considered, even that chip, the A800, would be export restricted without licensing, the Journal reported.
The restrictions would also apply to companies that offer cloud-based computing solutions, the Journal reported, which have been used by some companies to skirt export controls.
Competition between the U.S. and China over hardware and software technology has amplified in recent years. Cybersecurity threats from Chinese state-backed threats have been identified by top U.S. officials as one of the top national security threats facing the United States. Sensitive technology has allegedly been stolen from American companies to benefit Chinese domestic competitors, whether through outright industrial espionage or through joint-venture projects, which require American companies to partner with Chinese firms to do business within China.
Against this backdrop, tightened chip export controls would likely further inflame trade tensions between the two countries. U.S. officials have tried to mitigate potential impacts, but a tightening of export controls would likely jeopardize those efforts. Gina Raimondo, who as secretary of Commerce would lead the enforcement of any export controls, met with her Chinese counterpart in Beijing earlier this year.
Nvidia declined to comment, as did the Bureau of Industry and Security, which is the Commerce Department’s export control unit. AMD did not immediately respond to a request for comment.
Source: Consumer News Business Channel