The United States increased its ban on the export of high-end Nvidia and Advanced Micro Devices (AMD) artificial intelligence chips outside of China to other regions, including some Middle Eastern nations.

The limits, which affect Nvidia’s A100 and H100 processors intended to accelerate machine-learning activities, were described as not having a “immediate material impact” on the company’s outcomes in a regulatory filing this week.

Similar limits were sent to rival AMD as well, a source with knowledge of the situation told Reuters, adding that the decision will not materially affect AMD’s income.

Export restrictions are typically implemented by American government for national security reasons.

It was not immediately obvious what dangers were presented by exports to the Middle East, but a similar measure announced last year indicated an escalation of the U.S. crackdown on China’s technological capabilities.

The new licencing requirement “doesn’t affect a meaningful portion of our revenue,” according to a separate statement from Nvidia. We are collaborating with the American government to resolve this issue.

Through a spokeswoman, the Commerce Department, which oversees licencing rules for exports, stated on Thursday that the United States “has not blocked chip sales to the Middle East” and would not comment on whether it has placed new restrictions on particular US businesses.

The sale of AMD’s MI250 artificial intelligence chips to China would be stopped due to new licence requirements, the company claimed in September of last year.

Since then, Nvidia, AMD, and Intel have all revealed intentions to develop less potent AI chips that can be imported into China.

Nvidia claimed in a filing from last year, dated August 28, that U.S. officials told them the rule “will address the risk that products may be used in, or diverted to, a’military end use’ or’military end user’ in China.” Nvidia provided no explanation for the new limits.

This week, Nvidia did not disclose which Middle Eastern nations were impacted. The majority of the company’s $13.5 billion in sales for its fiscal quarter that concluded on July 30 came from the US, China, and Taiwan.

All other nations combined accounted for about 13.9% of sales, and Nvidia does not break out sales by region for the Middle East.

“During the second quarter of fiscal year 2024, the USG (U.S. 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,” Nvidia said in the Aug. 28 filing.

The statements from last year occurred at a time when tensions were rising over Taiwan’s future, which is where nearly all of the world’s top chip companies manufacture their chips.

The Biden administration took things a step further in October 2022 when it released a comprehensive set of export rules, which included a clause cutting off China’s access to specific semiconductor chips produced anywhere in the world using American machinery. Washington’s ability to impede Beijing’s technological and military advancements was significantly increased by the action.

Similar laws were later adopted by the Netherlands, Japan, and other countries this year.

Chinese organisations won’t be able to affordably perform the kind of advanced computing necessary for image and speech recognition, among many other activities, without American AI chips from companies like Nvidia and AMD.

In consumer applications like smartphones that can respond to inquiries and tag photographs, image recognition and natural language processing are prevalent. Additionally, they are employed by the military for tasks like searching satellite pictures for bases or weapons, as well as screening digital communications for intelligence gathering.

(Adapted from TheGuardian.com)

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