Although the business anticipated no immediate substantial impact, Nvidia’s financial leader claimed that limits on artificial intelligence chip shipments to China “would result in a permanent loss of opportunities for the U.S. industry.”

According to two people with knowledge of the situation, U.S. authorities are considering strengthening an export control regulation aimed at reducing China’s access to AI processors by capping their computational capacity.

While the US puts billions of dollars in subsidies into its own chip business, Washington established a broad set of regulations last October to hinder China’s semiconductor sector. By the end of July, the two persons predicted, the regulations might see an update.

“Over the long term, restrictions prohibiting the sale of our datacenter graphic processing units to China, if implemented, would result in a permanent loss of opportunities for the U.S. industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results,” Nvidia’s Chief Financial Officer Colette Kress said.

On Wednesday, the company’s stock price decreased 1.8%. Due to the surge in demand for AI chips, they have virtually tripled so far this year.

Nvidia claimed in September that American officials had requested the corporation cease sending two of its top processing chips to China for use in AI projects. To comply with export control regulations, Nvidia then started selling a brand-new, cutting-edge processor named the A800 in China.

According to the Wall Street Journal, the new restrictions that the U.S. is considering would prohibit sales of any chips—even those made expressly for Chinese consumers—without a special export licence from the U.S.

The U.S.-China technology spat has also affected other American chipmakers.

China’s cyberspace authority disallowed purchases by owners of critical infrastructure last month after failing items from memory chipmaker Micron Technology (MU.O) in a security examination.

Micron has stated that it anticipates the ban to have a low-double-digit percentage of an impact on its overall revenue. The company revealed on Wednesday that its quarterly revenue increased at a faster rate than anticipated.

(Adapted from BusinessToday.com)

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