US is planning new AI Chip export controls aimed at Nvidia | Tech News

US is planning new AI Chip export controls aimed at Nvidia

Under the Commerce Department proposal, expected in July, the US would revise export controls announced in October to make it harder to sell some chips to China without a license.

By:BLOOMBERG
| Updated on: Jun 29 2023, 10:45 IST
Chip
Nvidia Chief Financial Officer Colette Kress said Wednesday that the company is aware of the reports on tighter restrictions. (Bloomberg)
Chip
Nvidia Chief Financial Officer Colette Kress said Wednesday that the company is aware of the reports on tighter restrictions. (Bloomberg)

The Biden administration plans to tighten export controls announced in October to restrict sales of some artificial-intelligence chips to China, amid growing concerns about selling the technology to a key strategic competitor, people familiar with the matter said.

Under the Commerce Department proposal, expected in July, the US would revise export controls announced in October to make it harder to sell some chips to China without a license. The move is aimed in part at Nvidia Corp.'s A800 chip, which the US-based company designed after the earlier controls were announced. The product's configuration comes just within those limits.

Nvidia Chief Financial Officer Colette Kress said Wednesday that the company is aware of the reports on tighter restrictions. Strong overall demand for its products means that there will be no material impact to earnings should such rules be introduced, she said at an online investor event.

China represents about 20% to 25% of Nvidia's data center revenue, and — in the long term — any ban of exports to that country would represent a loss of opportunity, she said.

The Commerce Department declined to comment. Plans for the tighter controls were reported earlier by the Wall Street Journal.

The move highlights the Biden administration's determination to contain China's technological rise and could escalate tensions between the two countries.

After sliding earlier in the session, Nvidia shares recouped much of their losses Wednesday. The stock was down about 1.6% at $411.94 as of 12:29 p.m. in New York.

It's not clear whether the announcement will also include an extension of general licenses given to South Korean and Taiwanese companies. Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. won a one-year reprieve from the restrictions last October and have asked the White House to extend them by at least another year.

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First Published Date: 29 Jun, 10:30 IST
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