US orders Nvidia to stop selling AI chips to China

Chip designer Nvidia Corp (NVDA.O) said on Wednesday that US authorities had asked it to stop exporting two cutting-edge AI computer chips to China, a move that could cripple the ability of Chinese companies to perform advanced work like image recognition and hinder Nvidia’s business in the country.

Source : Reuters, Stephen Nellis and Jane Lanhee Lee
Translated by the readers of the Les-Crises website

Chip designer Nvidia Corp (NVDA.O) said on Wednesday that US authorities had asked it to stop exporting two cutting-edge AI computer chips to China, a move that could cripple the ability of Chinese companies to perform advanced work like image recognition and hinder Nvidia’s business in the country.

The announcement signals a major escalation in the US crackdown on China’s tech capabilities, as tensions arise over the fate of Taiwan, where chips from Nvidia and nearly every other major company are made. chip companies.

Nvidia’s stock fell 6.6% after hours. The company said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with the completion of development of the H100, the flagship chip it announced this year.

Shares of rival Advanced Micro Devices Inc. (AMD.O) fell 3.7% after hours. An AMD spokesperson told Reuters it had received new licensing requirements that will prevent its MI250 artificial intelligence chips from being exported to China, but believed its MI100 chips would not be not affected. AMD said it doesn’t believe the new rules will have a big impact on its business.

Nvidia said U.S. officials have told it the new rule “will address the risk of products being used or diverted to a military end-use or military end-user in China.” »

The US Department of Commerce would not say what new criteria have been set for AI chips that can no longer be shipped to China, but said it is reviewing its China-related policies and practices to “prevent advanced technologies from falling into the wrong hands. »

“While we are unable to outline specific policy changes at this time, we are taking a comprehensive approach to implementing additional necessary actions related to technologies, end uses and end users to protect the interests of national security and foreign policy of the United States,” a spokesperson told Reuters.

China’s Foreign Ministry reacted on Thursday by accusing the United States of trying to impose a ‘technology blockade’ on China, while its Commerce Ministry said such actions would undermine the stability of global supply chains. .

The logo of technology company Nvidia at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith

“The United States continues to abuse export control measures to restrict exports of semiconductor-related items to China, which China strongly opposes,” said spokesperson Shu Jieting. of the Ministry of Commerce, during a press conference.

This is not the first time that the United States has tried to block the supply of Chinese companies with chips. In 2020, former President Donald Trump’s administration banned vendors from selling chips made from American technology to tech giant Huawei without a special license.

Without American chips from companies like Nvidia and AMD, Chinese organizations won’t be able to cost-effectively perform the kind of advanced computing used for image and speech recognition, among many other tasks.

Image recognition and colloquial language processing are common in consumer applications such as smartphones that can answer questions and tag photos. They also have military uses, such as searching satellite images for weapons or bases and filtering digital communications for intelligence gathering purposes.

Nvidia said it recorded $400 million in sales of the affected chips this quarter in China, which could be lost if companies decide not to buy other Nvidia products. She indicated that she plans to seek exemptions to the rule.

Stacy Rasgon, financial analyst at Bernstein, said the disclosure indicated that about 10% of Nvidia’s data center sales came from China and the sales impact was likely “manageable” for Nvidia.

“It’s not a change in (investment) philosophy, but it’s not a good sign,” Rasgon said. Now the question is what will happen on both sides. »

Last week, Nvidia forecast a sharp decline in revenue for the current quarter due to weakness in the gaming industry. It said it expects third-quarter sales to fall 17 % compared to the same period last year.



Reporting by Eva Mathews and Nivedita Balu in Bengaluru, Stephen Nellis and Jane Lee in San Francisco, Karen Freifeld in New York and Alexandra Alper in Washington, Eduardo Baptista in Beijing; Additional reporting by Beijing newsroom; Editing: David Gregorio, Matthew Lewis and Kim Coghill.

Source : Reuters, Stephen Nellis and Jane Lanhee Lee01-09-2022
Translated by the readers of the Les-Crises website

1664783796 163 US orders Nvidia to stop selling AI chips to China

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US orders Nvidia to stop selling AI chips to China


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