The United States restricts sales of sophisticated chips to China and Russia

The Biden administration has placed new restrictions on sales of some sophisticated computer chips to China and Russia, the latest attempt by the US government to use semiconductors as a tool to stymie rivals’ advances in fields like high-end computing. performance and artificial intelligence.

The new limits affect high-end chip models known as graphics processing units, or GPUs, which are sold by Silicon Valley companies Nvidia and Advanced Micro Devices. Such products were originally developed to represent images in video games, but in the last decade they have been widely implemented in the largest supercomputers used by scientists and Internet companies for applications such as speech recognition and objects in photographs.

Supercomputers are used in applications including weapons development and intelligence gathering, and some large systems in China have been linked to surveillance of the country’s Muslim minorities. Artificial intelligence technology is also increasingly being used for purposes such as identifying faces in video images.

The restrictions are part of a cold war between China and the United States over primacy in advanced technologies. The Biden administration, building on limits initiated by former President Donald J. Trump, has adopted measures aimed at restricting the access of companies like China’s Huawei to advanced chips and foreign semiconductor manufacturing. China has designed many chips on its own, but generally relies on factories in Taiwan to make the most advanced models.

In statements on Wednesday, Nvidia and AMD acknowledged the new restrictions.

Nvidia, by far the largest GPU maker, said the federal government will now require it to seek export licenses to sell two high-end chips used with server systems in data centers. The government said the new requirement would address the risk that those products could be used or diverted for military use in China and Russia, according to the company.

Nvidia has many customers in China, but does not currently sell to Russia. He said the new measures hit a business that generated about $400 million in revenue in its most recent fiscal quarter.

AMD said the moves appeared to affect sales of one of its high-end GPUs to China and Russia. He said he didn’t think the restrictions would have a material effect on his business.

China’s Ministry of Commerce on Thursday accused the United States of abusing export control measures to restrict the export of semiconductor-related items to China, warning that the move would “hinder international scientific and technological exchanges and economic cooperation, and would have an impact on the stability of global industrial and supply chains and the recovery of the global economy.”

A Chinese Foreign Ministry spokesman said Washington’s actions were “typical of scientific and technological hegemonism.”

The scope of the US government’s actions appears to go beyond Nvidia and AMD. Other companies that make design tools or software have received similar letters in recent weeks informing them that the high-end technologies they export to China have been restricted, according to a person familiar with the situation, who asked to remain anonymous so he could speak directly. private. deliberations

A Commerce Department spokesman said it was conducting a review of policies related to China and may take further steps to prevent advanced technologies from falling into the wrong hands.

Without commenting specifically on the chip restrictions, the spokesman said possible future steps include “preventing China’s acquisition and use of US technology in the context of its military-civilian fusion program to further its military modernization efforts.” , commit human rights abuses and enable other malign activities”. .”

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In recent years, the Commerce Department’s Bureau of Industry and Security has tightened restrictions on the supply of certain US technologies to China, arguing that the products were sold through civilian supply chains but ultimately went to China. military uses, such as weapons, aircraft, and surveillance technology. . Businesses can apply for a license to sell restricted items to specific customers, but most of those applications are denied.

Statements from Nvidia and AMD indicated that they did not expect licenses to be awarded in most cases. AMD said it hoped the measures would “prevent” the sale of a product called the MI250 to China and Russia.

Nvidia said the measures affected an existing product, the A100, as well as a product expected to be available later this year, the H100. It added that the restrictions could affect its ability to complete H100 development in a timely manner or support existing A100 customers, and could require the company to transition certain operations out of China.

The measures come at a difficult time for Nvidia. Demand for GPUs used in video games and cryptocurrency mining dropped sharply, and in early August, Nvidia posted quarterly revenue well below what it had forecast in May.

Nvidia shares fell more than 6 percent on Wednesday night after it confirmed the new government restrictions, which had been the subject of previous articles in the Chinese media.

Paul Mozur and Alexandra Stevenson contributed reporting.

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