US Imposing Export Restrictions on AI Chips from Nvidia

According to sources, the Biden administration intends to strengthen export controls that were previously announced in October. The aim is to limit the sale of certain artificial intelligence chips to China, as there are increasing worries about providing this technology to a significant strategic rival.

Under a Commerce Department proposal expected in July, the United States would revise export controls announced in October to make it harder to sell some chips to China without a license. The move is aimed in part at Nvidia Corp.’s A800 chip, which the U.S. company designed after earlier controls were made public. The product configuration is exactly within these limits.

Nvidia Chief Financial Officer Colette Kress said Wednesday that the company is aware of reports of tighter restrictions. Strong overall demand for its products means the introduction of such rules will not have a material impact on earnings, he said at an online investor event.

China accounts for about 20 to 25 percent of Nvidia’s data center revenue, and in the long term, a ban on exports to that country would mean a loss of opportunity, he said.

The Ministry of Commerce declined to comment. The Wall Street Journal previously reported on plans to tighten controls.

The move underscores the Biden administration’s determination to curb China’s technological rise and could exacerbate tensions between the two countries.

After sliding earlier in the session, Nvidia shares recovered much of their losses on Wednesday. The stock was down about 1.6% to $411.94 by 12:29 p.m. In New York.

It is not clear whether the announcement also includes the extension of general licenses granted to South Korean and Taiwanese companies. Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. received a one-year reprieve from the restrictions last October and have asked the White House to extend them for at least a year.