Nvidia and AMD ordered to stop sales of their top AI chips to China
Nvidia says it is working with customers in China to fulfil their planned or future product orders with alternative products
The US government has ordered two of the most successful chipmakers in the country, Nvidia and AMD, to cease selling their most advanced chips to China, arguing that they could be used in artificial intelligence systems.
Nvidia said the US regulatory filing, published on Wednesday, would affect exports of its A100 and upcoming H100 chips, which are designed to accelerate machine learning tasks.
The new requirements will also impact the systems that integrate A100 and H100 chips.
Nvidia said that the US government is demanding a new licence, effective immediately, to address the risks that the covered products may be utilised in, or diverted to, a "military end user" in China.
Consumer apps like those seen on smartphones, which can answer queries and tag photographs, often make use of natural language processing and image recognition technology. These technologies also have military applications, such as searching satellite pictures for weapons or bases and filtering digital communications in order to collect information.
Nvidia says it is currently working with customers in China to fulfil their planned or future product orders with alternative products, and may seek licences where substitutes aren't sufficient.
The company anticipates around $400m in sales to China to be impacted if customers decline to purchase the company's alternative product offerings or if the US government does not grant licences in a timely manner or denies licences to significant customers.
An AMD representative said the company had received additional licencing requirements that would prevent the shipment of its MI250 artificial intelligence processors to China, although it does not anticipate any impact on its MI100 chips.
According to AMD, the new rules won't have a material impact on its business.
Nvidia and AMD pointed out that the new mandate also includes a ban on exports to Russia. Both firms said that they do not presently export any goods to Russia.
The new regulations mark a major escalation in the US crackdown against China's technical capabilities as tensions boil over the future of Taiwan, where Nvidia's chip are made.
The US Department of Commerce said it was examining its China-related rules and procedures in order to prevent cutting-edge technology from falling into the wrong hands. However, it did not specify what additional standards it had set for AI chips that can no longer be exported to China.
"While we are not in a position to outline specific policy changes at this time, we are taking a comprehensive approach to implement additional actions necessary related to technologies, end-uses, and end-users to protect U.S. national security and foreign policy interests," the Commerce Department said.
Chinese authorities have criticised the latest move. The US actions, according to state media, breach international economic and trade laws and go against the idea of fair competition.
Beijing has urged the US to "immediately stop its wrongdoing, treat companies from all over the world including Chinese companies fairly, and do more things that are conducive to the stability of the world economy."