The US expanded the restriction of exports of sophisticated Nvidia and Advanced Micro Devices (AMD) artificial-intelligence (AI) chips beyond China, which included other regions such as some Middle Eastern nations.
Washington's curbs were done despite Nvidia's warning that chip export curbs would risk the competitiveness of US-made AI chips in the world market, especially in China.
Nevertheless, the company said in a regulatory filing this week that the curbs affecting its A100 and H100 chips designed to speed up machine-learning tasks would not immediately impact its results.
In a separate statement, Nvidia, one of the world's most valuable companies at $1.2 trillion, said the new licensing requirement does not affect any meaningful portion of the company's revenue.
"We are working with the U.S. government to address this matter," the company added.
A source familiar with the matter told Reuters that AMD also received an informed letter about the matter with similar restrictions and the move had no material impact on its revenue. Last September, AMD said it had received new license requirements that would halt exports of its MI250 artificial-intelligence chips to China.
Read Also: China's EV Industry Slows Down, Affecting Nvidia's Automotive Business
Denying Tech Innovations to Adversaries
It is usual for US officials to impose export controls for national security reasons, as a similar move was announced last year to signal an escalation of US crackdown on China's technological capabilities. However, it was not immediately clear what risks were posed by exports to the Middle East.
Nevertheless, Nvidia, AMD, and Intel have since disclosed plans to create less powerful AI semiconductors that could be exported to the Chinese market.
Nvidia also said last year that US officials informed them the rule would address the risk their products might be used in, or diverted to, a "military end use" or "military end user" in China. However, they have not specified which countries in the Middle East would be affected by Washington's curbs.
The company derived most of its $13.5 billion sales in its fiscal quarter that ended July 30 from the US, China, and Taiwan, while 13.9% of its sales came from all other countries combined.
"During the second quarter of fiscal year 2024, the [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 company said in Monday's (August 28) filing.
The announcements from Washington came as tensions bubbled over the fate of Taiwan, where chips of Nvidia and almost every other major chip firm were manufactured. The situation only got worse after the Biden administration went a step further when it published a sweeping set of export controls, including a measure to cut off China from certain semiconductor chips made anywhere in the world with US equipment in an effort to slow Beijing's technological and military advances.
Without American-made AI chips from Nvidia and AMD, Chinese tech firms could not cost-effectively carry out the kind of advanced computing used for image and speech recognition, among other tasks.
The US Commerce Department, which regulates the licensing requirements on exports, has yet to comment on the matter as of this report. Meanwhile, Japan and the Netherlands followed the US' lead by imposing similar rules for their chip exports and imports earlier this year.
