The US is determined to strangle China’s artificial intelligence chip industry

The move could cripple Chinese companies’ ability to do highly technical tasks like image recognition, while also hampering the business Nvidia hopes to generate 400 percent of revenue. million USD in the third quarter of 2022.

Nvidia’s stock price has dropped 4% in just a few hours since the announcement. The company said the ban affects its A100 and H100 chips, which are designed to speed up machine learning tasks, which in turn could hinder the completion of development on the H100, the flagship chip Nvidia has already built. announced this year.

Nvidia’s stock price has fallen 4% in the hours since the announcement. Photo: Reuters

Nvidia said US officials told them the new rule would address the risk associated with protective products that could be used or diverted for “military” or “human” end use. the last resort is the military” in China.

Share price of Nvidia rival Advanced Micro Devices (AMD) also fell 2% after a few hours. An AMD spokesman told Reuters it had received new license requests that would prevent the export of the MI250 artificial intelligence chip to China, but AMD believes its MI100 chip will not be affected.

AMD said it does not believe the new rules enacted by the US government will have a significant impact on the company’s business.

The new announcement signals a dramatic escalation by the United States to crack down on China’s technological prowess as the two sides stand tall over Taiwan, which makes chips for Nvidia and most other major chipmakers.

Nvidia said it received orders to produce $400 million worth of chips for Chinese companies in the third quarter of 2022. This money could be lost if Chinese companies decide not to buy Nvidia alternatives. The US chipmaker said it plans to apply for an exemption from the rule but it is unlikely that US officials will grant it.