Key Highlights
- The US government orders Nvidia and AMD to halt selling their AI chips to China.
- The requirement was due to a potential risk of products being used by a military end user.
The top chip makers of America, Nvidia & AMD, have been ordered to stop selling some of their technology that can be used for AI to China.
Both companies said that the US government had told them to stop exports of specific high-performance chips to the second largest economy in the world. In a regulatory filing, Nvidia said that US officials told them that the requirement was due to a potential risk of the AI chips being used by, or diverted to, a “military end user.”
It said that the restrictions cover Nvidia’s A100 and forthcoming H100 integrated circuits and any systems that include them, effective immediately. According to the filing, the move threatens to upend $400 million worth of business for Nvidia. That is roughly what the California-based tech giant projected last week in potential sales to China, which could be affected by the new requirement.
Nvidia shares tumbled 6.6% in after-hours trading, while AMD stock was down 3.7%. Nvidia said it was working with the customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements are not sufficient.
AMD, headquartered in California, said it had also been given new requirements by the US Department of Commerce to hit shipments of its MI250 integrated circuits to China.
The new rules are a reminder of how US-China tensions remain high over tech and business. Last week, a rare agreement between the two countries on auditing US-listed Chinese companies suggested a breakthrough in relations, but experts have warned the deal will do little to resolve other key issues.
Nvidia and AMD noted that the new mandate for chip makers also covers a ban on exports to Russia. Both companies said currently, they do not sell any products to Russia.
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