The Biden administration announced on Tuesday that as part of a series of steps to prevent Beijing from obtaining cutting-edge American technologies to bolster its military, it intends to prohibit shipments of more sophisticated artificial intelligence chips made by Nvidia and others to China.

The regulations, which were detailed by top administration officials at a press briefing on Monday evening, blacklist Chinese chip designers Moore Thread and Biren and restrict access to a wider range of advanced semiconductors and chipmaking tools to a greater number of nations, including Iran and Russia.

Gina Raimondo, secretary of the Commerce Department, stated that the new measures, which aim to close regulatory loopholes and will likely be modified “at least annually,” are intended to impede China’s military growth.

She emphasised that the administration was not aiming to harm Beijing economically, only to restrict Beijing’s access to “advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to (Chinese) military applications.”

Although China and the United States have been engaged in a long-running technology conflict, tensions between the two countries increased after broad limitations were announced in October of last year.

Leading AI chip manufacturer Nvidia has produced chips like the A800 and H800 that strictly adhered to the old regulations in order to continue selling to China, and AMD, which was also negatively hit by the regulations, has stated it plans to take a similar course of action.

Because its China-only processors are still superior to alternatives, Nvidia’s business has increased dramatically since the rules were implemented last year. The Silicon Valley company is now selling nearly every chip it can find as global demand exceeds supply, but would suffer in the long run as Chinese chip firms compete to fill any gaps left by U.S. corporations.

The new regulations will affect Nvidia’s A800 and H800 chips because of a change in chip characteristics intended to capture more chips.

The majority of consumer chips used in laptops, cellphones, and gaming devices will be excluded from the regulations, though some may be subject to licencing and notification requirements by U.S. authorities.

The prior regulations mandated a two-pronged test that assessed a chip’s processing performance as well as its interprocess communication capabilities, a crucial factor in AI supercomputers where hundreds of chips are connected to process enormous amounts of data.

For the Chinese market, Nvidia and Intel developed specialised CPUs with advanced computational capabilities but constrained communications rates to comply with earlier regulations.

According to a senior administration official, the guidelines announced on Tuesday erase communication speed restrictions and put the emphasis on processing performance, which will have the impact of stopping sales of Nvidia’s A800 and H800 chips for the China market.

According to a senior administration official, U.S. officials introduced a new restriction on Tuesday to chips that surpass a specific level of “performance density,” a measurement centred on how much computer power can be crammed onto a particular quantity of silicon.

Using a technique known as “chiplets,” the senior administration official explained that this rule was intended to stop businesses from attempting to circumvent limitations on entire chips by joining together small bits to create a larger chip that would be in violation of the regulations.

According to reports from July, chiplets have taken a central role in China’s technology strategy for developing its chip sector. Analysts have suggested that Chinese firms may exploit the technology to get over U.S. prohibitions.

According to the officials, the new regulations further increase licencing requirements for exports of advanced semiconductors to more than 40 additional nations that pose a risk of being diverted to China and are subject to American arms embargoes.

This action appears to be a follow-up to a letter Nvidia claimed restricted the export of its A100 and H100 chips to nations outside of China, including several in the Middle East, when it was received in August.

Chips won’t be allowed to be transferred to branches of businesses situated anywhere in the globe if their parent companies are based in China, Macau, or other nations subject to a weapons embargo. This confirms an earlier report.

The action is a part of an effort to prevent the chips from being remotely accessed by Chinese parent businesses or being smuggled illegally into China.

Additionally, the Biden administration expanded the list of equipment that is prohibited from entering China and struck 21 non-Chinese nations with a licencing requirement for chipmaking gear.

Officials made a point of emphasising that National Security Advisor Jake Sullivan, Treasury Secretary Janet Yellen, and Commerce Secretary Gina Raimondo had warned Chinese officials about the impending changes, corroborating previous reports.

(Adapted from MoneyControl.com)

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