US officials order Nvidia to halt sales of top AI chips to China
- The move could cripple Chinese firm’s ability to carry out work like image recognition, and signals a major escalation in the US-China tech war
- The advanced chips have commercial uses, but also have military computing applications, such as scouring satellite imagery for weapons or bases
Chip designer Nvidia Corp on Wednesday said that US officials told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple Chinese firms’ ability to carry out advanced work like image recognition and hamper a business that Nvidia expects to generate US$400 million in sales this quarter.
Nvidia shares fell 4 per cent after hours. The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip Nvidia announced this year.
AMD shares were down 2 per cent in after hours trading. An AMD spokesman told Reuters it had received new licence requirements that will stop its MI250 artificial intelligence chips from being exported to China but it believes its MI100 chips will not be affected. AMD said it does not believe the new rules will have a material impact on its business.
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Nvidia said 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”.
The announcement signals a major escalation of the US crackdown on China’s technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.
Without American chips from companies like Nvidia and its rival Advanced Micro Devices, Chinese organisations will be unable to cost-effectively carry out the kind of advanced computing used for image and speech recognition, among many other tasks.
Image recognition and natural language processing are common in consumer applications like smartphones that can answer queries and tag photos. They also have military uses such as scouring satellite imagery for weapons or bases and filtering digital communications for intelligence gathering purposes.