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The Biden administration is implementing new export controls for cutting-edge artificial intelligence chips, which will greatly restrict the sale of high-performance semiconductors to China by Nvidia and other manufacturers.
The US commerce department has extended the existing export controls introduced in October 2022 to adapt to technological advancements and prevent companies from circumventing the restrictions.
Commerce secretary Gina Raimondo stated that the purpose of this update is to limit China’s access to advanced chips crucial for the Chinese military and that could contribute to advancements in artificial intelligence and sophisticated computers.
This development comes ahead of a possible summit between Joe Biden and Xi Jinping at the Asia-Pacific Economic Cooperation forum in San Francisco.
While China has criticized the US export controls, US officials have emphasized during recent visits to Beijing that the Biden administration seeks more engagement but will not hesitate to take national security actions when necessary.
Nvidia, AMD, and Intel’s graphics processing units (GPUs) have become integral for training large AI models in various industries, resulting in high demand for the latest chips.
Following last year’s rules, Nvidia designed modified versions of its top-tier H100 and A100 GPUs specifically for Chinese customers, ensuring compliance with US thresholds.
Chinese tech companies hurried to purchase these modified GPUs, essential for generative AI, amid concerns of tighter restrictions by the US.
According to a US official, the updated rules will prohibit Nvidia from selling A800 and H800 GPUs in China. The new rules will also impact Intel’s Gaudi2 AI chip.
Nvidia CEO Jensen Huang previously expressed concerns about the 2022 controls restricting sales of the company’s most advanced chips to China and warned that further restrictions could harm US chipmakers’ investment capabilities.
Nvidia stated on Tuesday that it complies with all regulations and does not expect significant financial impact in the near term due to global demand for their products.
Gregory Allen of the CSIS think-tank noted that the new rules will immediately cut China off from advanced AI chips, leaving them with significantly inferior options compared to the West.
Under the revamped export controls, the US will prohibit the sale of data centre chips capable of operating at speeds of 300 teraflops and above to Chinese groups.
Chips with speeds ranging from 150 to 300 teraflops will be banned if they have a performance density of 370 gigaflops per square millimeter or higher.
Raimondo confirmed exemptions for chips used in consumer products such as smartphones and gaming but exporters must notify the government when exporting chips with speeds exceeding 300 teraflops.
The updated rules also expand the list of chipmaking tools that cannot be sold to China, and two Chinese groups will be added to the “entity list”, severely limiting their access to US technology. These groups are involved in the design of chips that undermine US national security.
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