Sale of top AI chips to be halted with China per U.S. decree

YARMOUTH, Maine – Multinational American technology company NVIDIA said in a Securities and Exchange Commission filing August 26 that U.S. Government officials are enforcing the restriction of sales for its top AI chips with China.

The move comes as tension continues to grow between the two countries and rising fears of China using the technology for military applications and surveillance applications domestic and abroad. On the chopping block of note are the company’s A100, H100, and A100X integrated circuits.

“The license requirement also includes any future NVIDIA integrated circuit achieving both peak performance and chip-to-chip I/O performance equal to or greater than thresholds that are roughly equivalent to the A100, as well as any system that includes those circuits. A license is required to export technology to support or develop covered products. The USG indicated that the new license requirement 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 and Russia.” The SE filing states, and goes on to clarify, “The Company does not sell products to customers in Russia.”

NVIDIA notes that while it will work to request exemptions for its Chinese customers that request exemptions, it doesn’t expect any to be granted, or granted with any haste by the U.S. Government. It seems unlikely they would be considering fears that the technology could be used to develop dangerous drones and Machine Learning, the AI in AI chips, can be used in Cybersecurity applications to increase speed and efficiency in pattern recognition both for the purpose of things like fighting malware attacks or facial recognition from security footage.

For it’s part China is not happy, referring to the move as a U.S. “Tech Blockade” and other comments in press briefings on the subject. It’s also a disappointing blow for NVIDIA who’s been seeing a slowing of growth from their previous quarter due to global economic factors. This hit they expect could cost them as much as $400 million in potential sales with the country.

“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” NVIDIA founder and CEO Jensen Huang said in a release on the company’s Q2 fiscal results. “Accelerated computing and AI, the pioneering work of our company, are transforming industries. Automotive is becoming a tech industry and is on track to be our next billion-dollar business. Advances in AI are driving our Data Center business while accelerating breakthroughs in fields from drug discovery to climate science to robotics.” NVIDIA Stock prices fell sharply following the news hitting major media outlets and was down 1.71% at the time of this filing.

The full SEC filing can be read at www.sec.gov.