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The Biden administration is considering implementing new export controls on artificial intelligence chips as part of its efforts to restrict China’s access to military technology.
The US commerce department is planning to update existing export controls introduced in October, which could make it more difficult for companies like Nvidia and Advanced Micro Devices to sell advanced chips to China, according to insiders.
This move would have a significant impact on Nvidia, who had responded to the October controls by developing new graphics processing unit chips—A800 and H800—to replace the restricted ones.
Nvidia’s CEO, Jensen Huang, stated that the current export controls have the potential to cause “enormous damage” to the US tech industry. He expressed frustration over the restrictions that prevented the company from selling its most advanced chips to China.
While the A800 and H800 chips are slower than their predecessors, they still play a crucial role in AI research and development for major Chinese tech companies like Tencent, Alibaba, Baidu, ByteDance, among others.
According to sources, these Chinese groups have already placed additional orders for Nvidia chips to support their generative AI initiatives.
This proposed measure is part of President Joe Biden’s broader strategy to limit China’s access to advanced technologies, particularly AI chips that could be used for military purposes like hypersonic weapons and nuclear weapons modeling.
Earlier this year, the Financial Times reported that Chinese companies, including blacklisted AI surveillance groups, were finding ways to bypass export controls by renting access to A100 chips.
The Biden administration aims to establish a “high fence” around critical technologies like AI, preventing the Chinese military from utilizing American technology for potential harm to US security interests, according to US national security advisor Jake Sullivan.
China accuses the US of attempting to contain its growth. In response, China recently banned Chinese infrastructure operators from purchasing chips from US-based semiconductor maker Micron, seen by experts as a retaliatory move.
In addition to export controls, Biden is also set to issue an executive order to screen investments bound for China, aiming to reduce the risk of US investors inadvertently supporting the Chinese military.
The US and EU have emphasized a targeted “de-risking” approach in specific sectors, rather than advocating for complete decoupling. However, Chinese Premier Li Qiang criticized this policy, calling any attempt to de-risk from China a “false proposition.”
The update of export controls is expected to take place during the summer. This comes as the US and China continue their efforts to stabilize their relationship, which has reached its lowest point since diplomatic ties were established in 1979.
Last week, US Secretary of State Antony Blinken visited China and held meetings with President Xi Jinping, Chinese Foreign Minister Qin Gang, and top diplomat Wang Yi. Both sides described the visit as “constructive.” However, President Biden’s informal remarks referring to Xi as a “dictator” posed an immediate setback to the nascent effort to improve relations.
The US commerce department and Nvidia declined to comment on the expected export controls update, which was first reported by the Wall Street Journal.
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