The Biden administration is taking steps to prevent the export of advanced artificial intelligence Nvidia Chip Exports to China, which are designed by companies like Nvidia. These actions are part of a broader effort to limit China’s access to cutting-edge US technology, particularly in the context of bolstering its military capabilities.
The new rules, scheduled to be implemented in 30 days, will effectively stop the shipment of advanced artificial intelligence chips to China. This restriction doesn’t just apply to Nvidia but also extends to other chip manufacturers.
Furthermore, these regulations have expanded their scope, now encompassing more countries, including Iran and Russia. The list of affected items now includes advanced chips and chipmaking tools. Additionally, Chinese chip designers Moore Threads and Biren have been placed on a blacklist.
Commerce Department Secretary Gina Raimondo has emphasized that these measures will be regularly updated. The primary aim is to prevent China from acquiring advanced semiconductors that could potentially enhance their military applications. Importantly, the Biden administration’s intention is not to inflict economic harm on China. The country will still be allowed to import billions of dollars’ worth of US semiconductors.
China has reacted strongly to these new restrictions. The Chinese embassy expressed its strong opposition to these measures, arguing that imposing arbitrary restrictions and pursuing decoupling for political reasons contradicts the principles of fair competition and disrupts the international economic and trading order.
Despite prior restrictions, it seems that AI chips previously banned can still be obtained from vendors in China’s Shenzhen region. A report from Georgetown University’s Center for Security and Emerging Technology found that a significant number of AI chips purchased for Chinese military use were designed by companies such as Nvidia, Xilinx, Intel, and Microsemi. These chips play a crucial role in enhancing military decision-making, planning, and logistics through advanced AI capabilities and supercomputing.
In summary, the Biden administration’s latest actions reflect its ongoing efforts to control the export of advanced chips to China, particularly those with military applications. These steps are driven by concerns over the role of US technology in modernizing China’s military capabilities.
US AI Technology Contributes to China’s Military Advancements
Recent findings underscore how American AI technology is supporting China’s military endeavors, even as the Biden administration attempts to restrict the flow of chips and chipmaking tools to China.
In June, Reuters reported that certain AI chips previously banned by regulations could still be obtained from vendors in China’s Shenzhen.
A report from Georgetown University’s Center for Security and Emerging Technology, published in June 2022, revealed a significant trend. Out of 97 individual AI chips acquired through Chinese military tenders over an eight-month period in 2020, the majority were designed by companies like Nvidia, Xilinx, Intel, and Microsemi.
The incorporation of AI capabilities, coupled with supercomputing and advanced chips, is seen as a means to enhance the speed and precision of military decision-making, planning, and logistics. These developments, as indicated in recent regulations, are a source of mounting concern for the US government.
These findings suggest a challenging situation for the Biden administration, which is grappling with efforts to limit the accessibility of such technology to China while the role of US technology in modernizing China’s military capabilities continues to raise questions.
New US Regulations Impact China-Exclusive Chips and Semiconductor Exports
Following the recent publication of regulations, it’s clear that the US is taking measures that affect the availability of China-exclusive chips.
Nvidia, a leading US AI chip designer, has stated that it complies with the new regulations and does not anticipate significant short-term consequences. However, in the long term, it could face challenges as Chinese chip companies seek alternatives to replace US products.
In response to previous regulations, Nvidia created chips like the A800 and H800, which pushed the boundaries of the existing rules, allowing them to continue selling to China. Similarly, AMD, another company affected by the regulations, is planning a comparable strategy.
Nvidia’s stock experienced a 3.7% drop, while AMD and Intel, both rival AI chip manufacturers, saw their shares decline by 0.6% and 1%, respectively.
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The new rules will exempt most consumer chips used in laptops, smartphones, and gaming devices. However, some of these chips will require licensing and notification by US officials.
Transition to Chiplet Technology
The previous regulations employed a two-pronged test that measured a chip’s computing performance and its ability to communicate with other chips, a crucial factor in AI supercomputers that rely on multiple chips for data processing.
Nvidia and Intel adapted their chips for the Chinese market by maintaining robust computing capabilities while limiting communication speeds to comply with the previous rules.
The new regulations introduce restrictions on the amount of computing power a chip can contain within a specific size. This measure is intended to prevent circumvention using new “chiplet” technology, which China sees as integral to its semiconductor industry’s future.
Biren and Moore Threads, two Chinese startups founded by former Nvidia employees, are set to compete with the US AI chip giant. Biren expressed strong opposition to its blacklisting and plans to appeal the decision, while Moore Threads strongly disagrees with its addition to the trade blacklist.
Expanded Licensing Requirements
The new regulations expand licensing requirements for the export of advanced chips to more than 40 additional countries deemed at risk of diverting technology to China and subject to US arms embargoes.
These measures also extend to the parent companies of units headquartered in China, Macau, and other embargoed countries. Additionally, the Biden administration imposed licensing requirements for chipmaking tools on 21 countries outside China, expressing concerns over equipment diversion to China and other national security issues.
Furthermore, some deep ultraviolet (DUV) lithography systems are now restricted from being sent to China, building on recent Dutch regulations. DUV equipment is less advanced than state-of-the-art extreme ultraviolet equipment (EUV) and has been withheld from China to a certain extent.
The Semiconductor Industry Association is evaluating the impact of the new rules, urging the administration to collaborate with allies. The group expressed concerns that overly broad, unilateral controls could potentially harm the US semiconductor industry without significantly advancing national security.
US officials informed their Chinese counterparts about these impending rules, as reported earlier by Reuters.
