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US bans Nvidia, AMD AI chips' export to some Mideast countries, amid China fears

The technological war between the United States and China is heating up, with both countries imposing limits on their prized assets.

The United States has broadened restrictions on the export of high-performance artificial intelligence chips by Nvidia and Advanced Micro Devices (AMD), extending them beyond China to other regions, including some countries in the Middle East, amid rising concerns about Beijing’s access to critical AI resources. 

Reuters reported Thursday that a regulatory filing by Nvidia stated that its state-of-the-art A100 and H100 chips, which speed up machine learning on AI apps such as ChatGPT had been put on a “no-export” list. Nvidia is one of the most valuable businesses in the world, worth around $1.2 trillion.

“During the second quarter of fiscal year 2024, the USG (US government) informed us of an additional licensing requirement for a subset of A100 and H100 products destined to certain customers and other regions, including some countries in the Middle East,” the California-based firm said in an Aug. 28 filing.

Nvidia said that the export ban would not have an “immediate material impact” on its financial results. Reuters reported that AMD had also been told that the company would have to implement similar restrictions. 

The Middle Eastern countries were not named, and the reason for the export ban was not given, but Washington often imposes such measures for national security reasons. For example, the sanctions might have been imposed on Middle Eastern countries that have close ties to China. Last week, several countries in the region were invited to join BRICS, the influential group of emerging economies of which China is a member, which likely concerned the Biden administration.

The United States and China are battling for technological supremacy and are doing so in part by blocking access to their own technology. Beijing on July 3 announced export controls on gallium and germanium to Europe and the United States. The two rare metals are essential for manufacturing semiconductors. 

A100 and H100, which are essential for such AI tasks as image and voice recognition, are already banned for export to China and Russia. Instead, Nvidia exports H800 and A800 chips, which have reduced performance, to China. Sanctions prevent Russia from acquiring them directly, but it buys a lot of US-made chips from China and other intermediaries.

Last August, Nividia said US officials had told them not to export chips to China to avoid the risk that they might be used in a military context. 

Earlier this month, US tech giant Intel said it would cancel its acquisition of Israeli chipmaker Tower Semiconductor, after reportedly failing to receive approval for the merger from China, with which Intel has deep ties. The company has operated there since the mid-1980s, and as of last year, it employed more than 12,000 people there. In China, regulators review mergers of companies that earn a certain amount of revenue in the country. Of note, Tower also has an office in Shanghai.

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