US Chip Export Restrictions: US slows licence approvals for AI chip exports to prevent resale to China

US officials have slowed the issuance of licences to chipmakers such as Nvidia Corp and Advanced Micro Devices Inc (AMD) for large-scale AI accelerator shipments to West Asia, according to a report by The Economic Times (ET).

This move comes as the government conducts a national security review of AI development in the region.

 

The Biden administration has been actively working to prevent advanced semiconductors and manufacturing equipment from reaching China, fearing their use in bolstering China’s military capabilities.

 

The duration of the review and the specific definition of a large shipment remain unclear. This is expected to impact high-volume sales to countries like the United Arab Emirates (UAE) and Saudi Arabia, which seek significant imports of chips for AI data centres.

Nvidia pioneered AI accelerators, which are crucial for processing the large volumes of data required for developing artificial intelligence tools such as chatbots. These chips are essential for companies and governments building AI infrastructure.

In October, the US Commerce Department extended chip export restrictions to include much of West Asia, along with China and other foreign nations.

As a result, companies must obtain a special license to ship advanced semiconductors and chipmaking tools to these countries.

Concerns persist that Chinese companies, largely excluded from American technology, could access these chips through West Asian data centres.

License applications submitted under this rule have faced delays or non-responses from US officials in recent weeks, affecting attempts to sell to customers in the UAE, Saudi Arabia, and Qatar. Nvidia, AMD, Intel Corp, and startup Cerebras Systems Inc all produce accelerator chips and have been affected by these delays, ET noted.

First Published: May 31 2024 | 1:30 PM IST