The US weighs tighter restrictions on AI chip exports to China

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The Biden administration is contemplating new export controls on AI chips, as Washington ramps up its efforts to make it more difficult for China to obtain technology with military applications.

The US Commerce Department is preparing to update sweeping export controls introduced last October in ways that could make it more difficult for companies like Nvidia and Advanced Micro Devices to sell advanced chips in China, according to three people familiar with the news. situation.

The move would have a significant impact on Nvidia, which responded to the Oct. 7 inspections by designing new graphics processing unit chips called the A800 and H800 to replace more advanced chips that were limited by the new rules.

Nvidia chief executive Jensen Huang recently told the Financial Times that existing export controls could cause massive damage to the US tech industry. He said they had left his company with its hands tied behind its back preventing the Silicon Valley group from selling its most advanced chips to China.

While the A800 and H800 are slower than the chips they replaced, they’re still the most important technology powering AI R&D for Chinese tech giants.

Tencent, Alibaba, Baidu, ByteDance and other Chinese groups have placed additional orders for Nvidia chips as the wave of generative AI exploded in China this year, according to two people familiar with the situation.

The new move would mark President Joe Biden’s latest effort to make it harder for China to obtain advanced technologies, including AI chips that can be used for everything from research and development of hypersonic weapons to modeling nuclear weapons.

The FT reported in March that Chinese companies, including AI surveillance groups blacklisted by the US, were finding ways to bypass export controls, including by leasing access to A100 chips.

US National Security Advisor Jake Sullivan described the Biden administration’s approach as creating a high fence around a small courtyard of critical technologies such as artificial intelligence, which are capable of enabling the Chinese military to use American technology to harm US security interests.

Beijing accuses the United States of trying to contain China. In a move in May that most experts saw as retaliation, China banned Chinese infrastructure operators from buying chips from Idaho-based semiconductor maker Micron.

Biden is also preparing to issue an executive order that would create a mechanism to screen investments destined for China, in an effort to reduce the chances that US investors will help prop up the Chinese military.

In recent months, the US and the EU have emphasized that they are engaging in risk reduction in targeted sectors and are not pushing for broader decoupling. Chinese Premier Li Qiang this week criticized that policy, saying any attempt to reduce risks from China was a false proposition.

The update of export controls is expected to take place during the summer. It will come as the United States and China continue to attempt to stabilize their relationship, which has plummeted to its worst level since the countries established diplomatic ties in 1979.

US Secretary of State Antony Blinken visited China last week for meetings with President Xi Jinping, Chinese Foreign Minister Qin Gang and Wang Yi, China’s top diplomat.

Xi and Blinken described the visit as constructive. However, nascent efforts to cap the relationship suffered an immediate setback when Biden last week described Xi as a dictator in off-the-cuff remarks at a presidential campaign fundraising event.

The US Commerce Department and Nvidia declined to comment on the expected update, which was first reported by the Wall Street Journal.

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