US Export Ban on Advanced AI Chips to Hit China's Access to Technology

The US government's efforts to restrict the shipment of high-performance chips by Nvidia and Advanced Micro Devices (AMD) to China added to mounting tension between the countries over technology and security. The chips are designed to run artificial intelligence applications and power data centres and the restrictions would affect Chinese firms' ability to perform advanced technologies such as image and speech recognition. Nvidia's A100 and H100 integrated circuits and AMD's MI250 will be hit by the requirements.

The US has tightened its effort recently to cut off the flow of advanced technology to China by banning exports of some advanced chips and tools made by American chipmakers. The orders underscore deepening tensions between two countries over access to advanced chip technology.

As per a report by Reuters, some national security experts saw the US move as a long time coming. GPUs "have been totally uncontrolled to China and to Russia, so in a lot of ways I see this action as kind of catching up to where the controls probably should have been if we were really serious about trying to slow China's AI growth," the report quotes Emily Kilcrease, a senior fellow at the Center for a New American Security, as saying.

Nvidia earlier on Thursday confirmed that the restrictions would cover its A100 and upcoming H100 integrated circuits. AMD's MI250 chip will also be affected by the new requirements. Shares of the chipmakers plunged after the announcement and the Philadelphia semiconductor index was down 2.18 percent.

Nvidia later announced that US officials have authorised it to fulfill orders for the chips through its Hong Kong facility for a year.