Chip designer Nvidia Corp said that U.S. officials told it to stop exporting two top computing chips for artificial intelligence work to China, A move that could cripple the Chinese firm’s ability to carry out advanced work like image recognition and hamper Nvidia’s business in the country. The announcement signals a major escalation of the U.S. crackdown on China’s technological capabilities as tensions bubble over the fact of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.
Nvidia said that US officials instructed it to stop selling its powerful A100 and H100 graphics processing unit (GPU) to customers in China, while AMD said it has received new license requirements that will prevent its MI250 artificial intelligence chips from being exported to China, Reuters reported. The US Department of Commerce has not officially announced the new restrictions.
The ban on selected chips, which China is still unable to make itself, marked an escalation from current trade sanctions targeted at specific companies and sales restrictions on advanced chipmaking equipment. The ban is set to crimp the ability of Chinese tech companies in areas such as metaverse, artificial intelligence, cloud computing, and even facial recognition, and data centers.
Chinese foreign ministry spoke person Wang Wenbin said on Thursday that the US ban was “typical technology hegemonism” and an abuse of the national security concept. The US “is attempting to take advantage of its own technology edge to constrain and depress development of emerging markets and developing countries, China firmly opposes it.”
“China firmly opposed such restrictions as they would “hurt not only legitimate rights of Chinese companies but also interested of American businesses”. News of the latest US chip restrictions also stirred debate in China’s chip industry. An industry expert said the new US export controls were a worrying sign for China as it still must rely on US firms for many necessary products and components. “In the long-term, China’s development in technology will be affected if export controls further escalate to more semiconductors such as CPU and FPGA chips.”
The ban is part of Washington’s efforts to send China access to advanced US chip technologies over fears they could be used by the Chinese military, Nvidia said U.S. officials told it the new rule “will address the risk that products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China.
Separately, Washington is backing a Chip4 Alliance with Japan, South Korea, and Taiwan, a move that Beijing sees as an attempt to marginalize China’s role in global supply chains. The US is also pressing Dutch firm ASML to restrict Chinese sales of its high-end EUV lithography systems, which are used for the most advanced types of chips. China has been making significant progress in GPU research and development, but the country is still years behind AMD and Nvidia in advanced versions.
Nvidia said it had booked $400 million in sales of the affected chips this quarter to China that could be lost if the firm decides not to buy alternative Nvidia products. It is not clear how many Chinese users of the Nvidia and AMD GPU chips would be affected, But Wang pointed out that China’s large data centers required powerful GPUs as they have an edge in handling large troves of data in real-time.
