The US restricts exports of AI chips from Nvidia and AMD to some Middle Eastern countries

Aug 30 (Reuters) – The United States has expanded restrictions on exports of advanced artificial intelligence chips Nvidia (NVDA.O) and Advanced Micro Devices (AMD.O) out of China to other regions including some countries in the Middle East.

The restrictions, which affect the A100 and H100 chips designed to speed up machine learning tasks, will have “no immediate material impact” on its results, Nvidia said in a regulatory filing this week.

Rival AMD also received a letter familiar with similar restrictions, a person familiar with the matter told Reuters, adding that the move had no material impact on its revenue.

US officials usually impose export controls for national security reasons. A similar move announced last year signaled an escalation of the US crackdown on China’s technological capabilities, but it was not immediately clear what risks exports to the Middle East pose.

In a separate statement, Nvidia said the new licensing requirements “do not impact a significant portion of our revenue. We are working with the US government to address this issue.”

The US Department of Commerce, which normally administers new licensing requirements for exports, did not immediately respond to a request for comment.

Last September, AMD said it had received new licensing requirements that would halt exports of MI250 AI chips to China.

Since then, Nvidia, AMD and Intel (INTC.O) have all revealed plans to create less powerful AI chips that could be exported to the Chinese market.

A smartphone bearing the NVIDIA logo is placed on a computer motherboard in this illustration taken on March 6, 2023. REUTERS/Dado Rovik/Illustration/File Photo/File Photo Obtain licensing rights

Nvidia, which did not give a reason for the new restrictions in the Aug. 28 filing, said last year that U.S. officials told them the rule would “address the risk that products will be used or diverted to ‘military end use’ or ‘military end user’ in China.”

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Nvidia did not specify this week which countries in the Middle East were affected. The company got most of its $13.5 billion in sales in the fiscal quarter ended July 30 from the United States, China and Taiwan. About 13.9% of sales came from all other countries combined, and Nvidia generates no revenue from the Middle East.

“During the second quarter of fiscal year 2024, the US government notified us of additional licensing requirements for a subset of A100 and H100 products directed to certain customers and other regions, including certain countries in the Middle East,” Nvidia said. In the August 28 filing.

Last year’s announcements came as tensions rose over the fate of Taiwan, where chips for Nvidia and nearly all other major chip companies are made.

In October 2022, the Biden administration went a step further when it published a comprehensive set of export controls, including a measure to block China from certain semiconductor chips made anywhere in the world with American equipment. The move significantly expanded Washington’s reach in its attempt to slow Beijing’s technological and military progress.

Japan and the Netherlands followed similar rules earlier this year.

Without American AI chips produced by companies like Nvidia and AMD, Chinese enterprises would not be able to cost-effectively implement the kind of advanced computing used in image and speech recognition, among many other tasks.

Image recognition and natural language processing are common in consumer applications such as smartphones that can answer queries and tag images. It also has military uses such as scanning satellite images for weapons or bases and filtering digital communications for intelligence gathering purposes.

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(Reporting by Jasper Ward in Washington, Ismail Shakeel in Ottawa, Stephen Nellis and Max Cherny in San Francisco; Reporting by Mohammed for the Arabic Bulletin; Editing by Mohammed Al-Yamani) Additional reporting by Abhinaya Vijayaraghavan in Bengaluru; Editing by Chris Sanders, Nick Zieminski, Matthew Lewis and Lincoln Feast.

Our standards: Thomson Reuters Principles of Trust.

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