The Biden administration plans to tighten export controls announced in October to restrict sales of some artificial-intelligence chips to China, amid growing concerns about selling the technology to a key strategic competitor, people familiar with the matter said.
(Bloomberg) — The Biden administration plans to tighten export controls announced in October to restrict sales of some artificial-intelligence chips to China, amid growing concerns about selling the technology to a key strategic competitor, people familiar with the matter said.
Under the Commerce Department proposal, expected in July, the US would revise export controls 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 US-based company designed after the earlier controls were announced. The product’s configuration comes just within those limits.
Nvidia Chief Financial Officer Colette Kress said Wednesday that the company is aware of the reports on tighter restrictions. Strong overall demand for its products means that there will be no material impact to earnings should such rules be introduced, she said at an online investor event.
China represents about 20% to 25% of Nvidia’s data center revenue, and — in the long term — any ban of exports to that country would represent a loss of opportunity, she said.
The Commerce Department declined to comment. Plans for the tighter controls were reported earlier by the Wall Street Journal.
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The move highlights the Biden administration’s determination to contain China’s technological rise and could escalate tensions between the two countries. In a briefing Wednesday, Chinese embassy spokesman Liu Pengyu cited the Biden administration’s moves in the semiconductor industry as an example of a lack of respect that has prevented Washington and Beijing from discussing other issues.
“Communication first requires mutual respect and communication must deliver results,” Liu said. “We know that there are disputes on the semiconductor industry. But we haven’t seen any positive initiatives from the US side to say, ‘OK, how about we have communication on this issue?’”
After sliding early in the session, Nvidia shares recouped much of their losses Wednesday. The stock was down about 1.8% at the close in New York.
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It’s not clear whether the announcement will also include an extension of general licenses given to South Korean and Taiwanese companies. Samsung Electronics Co., SK Hynix Inc. and Taiwan Semiconductor Manufacturing Co. won a one-year reprieve from the restrictions last October and have asked the White House to extend them by at least another year.
–With assistance from Ian King and Iain Marlow.
(Updates with Chinese comment in 6th paragraph.)
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