US considering tougher restrictions on AI chip exports to China

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The Biden administration is considering new export controls on chips for artificial intelligence, as Washington steps up its efforts to make it harder for China to obtain technology with military applications.

The US Commerce Department is preparing to update sweeping export controls introduced last October in a way that will make it harder for companies such as Nvidia and Advanced Micro Devices to sell advanced chips to China, according to three people familiar with the situation.

The move will have a significant impact on Nvidia, which responded to the October 7 regulation by designing new graphics processing unit chips called the A800 and H800 to replace more advanced chips banned under the new rules.

Nvidia chief executive Jensen Huang recently told the Financial Times that the current export controls could cause “enormous damage” to the US tech industry. He said he left his company “with its hands tied behind its back” by preventing the Silicon Valley conglomerate from selling its most advanced chips to China.

While the A800 and H800 are slower than the chips they replaced, they are still the most important technology powering AI research and development for China’s tech giant.

When the generic AI wave exploded in China this year, Tencent, Alibaba, Baidu, ByteDance and other Chinese conglomerates placed additional orders for Nvidia chips, according to two people familiar with the situation.

The new move would mark the latest effort by President Joe Biden to make it harder for China to obtain advanced technologies, including AI chips that could be used for everything from research and development of hypersonic weapons to nuclear weapon modeling. Is.

The FT reported in March that Chinese companies, including AI watchdog groups blacklisted by the US, were looking for ways to evade export controls, including by renting access to A100 chips.

US National Security Adviser Jake Sullivan has described the Biden administration’s approach as building “high fences” around “small yards” of critical technologies such as AI, giving the Chinese military access to US technology to the detriment of US security interests. able to use.

Beijing accused the US of trying to “contain” China. In a move in May that most experts saw as retaliation, China banned Chinese infrastructure operators from buying chips from Idaho-based semiconductor maker Micron.

Biden is also preparing to issue an executive order that would create a mechanism for screening investments for China, in order to lower barriers to US investors helping to support the Chinese military.

In recent months, the US and EU have emphasized that they are engaged in “risk mitigation” in targeted areas and are not pushing for widespread isolation. Chinese Premier Li Keqiang criticized that policy this week, saying any attempt by China to reduce risk was a “false proposition”.

An update to export controls is expected sometime in the summer. It comes as the US and China continue to attempt to stabilize their ties, which have plunged to their worst level since the countries established diplomatic ties in 1979.

US Secretary of State Antony Blinken visited China last week for meetings with President Xi Jinping, Chinese Foreign Minister Qin Gang and China’s top diplomat Wang Yi.

Shea and Blinken described the trip as “creative”. However, nascent efforts to put a “floor” on the relationship were dealt an immediate blow when Biden described Xi as a “dictator” in unexpected comments at a presidential campaign fundraising event last week.

The US Department of Commerce and Nvidia declined to comment on the expected update, which was first reported by The Wall Street Journal.

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