The US plans to increase restrictions on AI chip exports from Nvidia (NVDA.US) and other companies to some countries

Zhitongcaijing · 10/15 12:57

The Zhitong Finance App learned that according to people familiar with the matter, Biden administration officials have discussed restricting sales of advanced artificial intelligence chips from Nvidia (NVDA.US) and other US companies according to specific countries. This move will limit artificial intelligence capabilities in some countries.

People familiar with the matter revealed that the new method will set export license caps for certain countries in the interests of national security. People familiar with the matter said that officials are concerned about Persian Gulf countries, which are increasingly interested in artificial intelligence data centers and are well-funded.

People familiar with the matter said that the review is still in its early stages and is still uncertain, but in recent weeks, the idea has received support. The policy will be built on a new framework to simplify the licensing process for shipping AI chips to data centers in places such as the United Arab Emirates and Saudi Arabia. Commerce Department officials announced these regulations last month and said more regulations will be introduced.

After setting a record closing on Monday, Nvidia's stock price fell more than 1% in pre-market trading on Tuesday.

A White House National Security Council spokesperson declined to comment on the talks, but mentioned the recent joint statement issued by the US and UAE on artificial intelligence. In the statement, the two countries acknowledged “the huge potential of artificial intelligence” and “the challenges and risks of this emerging technology and the critical importance of safeguards.”

Given that the US government is considering the security risks of global AI development, setting a national cap would tighten initial restrictions on China's ambitions in the field of artificial intelligence. The Biden administration has restricted companies such as Nvidia and AMD from shipping AI chips to more than 40 countries in the Middle East, Africa, and Asia due to concerns that these companies' products may be moved to China.

Meanwhile, some US officials are beginning to view semiconductor export licenses (especially those for Nvidia chips) as a bargaining chip to achieve broader diplomatic goals.

If the US administration continues to implement country-based restrictions, it may be difficult to introduce a comprehensive new policy within the last few months of Biden's presidency. These rules may be difficult to implement and will put a major test to America's diplomatic relations.

Nvidia CEO Hwang In-hoon said that governments around the world are pursuing so-called autonomous artificial intelligence, the ability to build and operate their own artificial intelligence systems, and this pursuit has become the main driving force behind the demand for advanced processors. Nvidia's chips are the gold standard for data center operators, making the company the world's most valuable chipmaker and the biggest beneficiary of the AI boom.

Meanwhile, China is working hard to develop its own advanced semiconductors, although they still lag behind America's best chips. However, US officials are concerned that if Huawei or other foreign manufacturers can one day provide viable alternatives to Nvidia chips, this may weaken America's ability to shape the global artificial intelligence landscape.

Some US officials believe that this is only a remote possibility. Given the current negotiating position, the US government should adopt stricter restrictions on global AI chip exports. Others warned against making it difficult for other countries to buy US technology as China could make progress and seize these customers.

While officials have been debating best practices, they have slowed down the pace of issuing large batch AI chip licenses to the Middle East and beyond. However, there are signs that things may begin to progress soon: under new rules on data center shipping, US officials will review and pre-approve specific customers based on the company's and its government's security commitments, paving the way for easier licensing in the future.