Nvidia to halt sales of AI chips to China: USA officials


US officials instructed Nvidia to halt sales of AI chips which may cripple Chinese enterprise capacity to perform advanced work such as image recognition and harm Nvidia’s operations in China. Nvidia’s stock dropped 6.6% after hours. The company stated that the embargo, which affects its A100 and H100 chips meant to accelerate machine learning operations, could impede the completion of the H100, Nvidia’s flagship chip unveiled this year. After hours, shares of Nvidia rival Advanced Micro Devices Inc slumped 3.7%. According to an AMD spokeswoman, the business has received new licensing requirements that will prevent its MI250 artificial intelligence processors from being exported to China, but it believes its MI100 chips would be unaffected. AMD said it does not believe the new rules will have a material impact on its business. Nvidia said the US officials told it the new rule “will address the risk that the covered products may be used in, or diverted to, a ‘military end use’ or ‘military end user’ in China”.When asked for comment, the US Department of Commerce said it is examining its China-related policies and practices to “keep advanced technologies out of the wrong hands,” but did not specify what additional criteria it had set for AI chips that can no longer be sent to China.

“While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implementing additional actions necessary related to technologies, end-uses, and end-users to protect US national security and foreign policy interests,” a spokesperson. The statement marks a significant increase in the US crackdown on China’s technological capabilities, as tensions rise over the destiny of Taiwan, where Nvidia and nearly every other big semiconductor business make chips. Without American processors from companies such as Nvidia and AMD, Chinese organizations will be unable to do advanced computing functions such as image and speech recognition. Consumer apps such as cellphones that can answer questions and tag photographs use image recognition and natural language processing. They also have military applications, such as searching satellite pictures for weapons or bases, as well as filtering digital communications for intelligence gathering. The chip ban comes as Nvidia last week already forecast a sharp drop in revenue for the current quarter on the back of weaker gaming industry. Nvidia said it expected third-quarter sales of $5.90 billion, down 17% from the same period last year.