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U.S. Restricts Sales of Sophisticated Chips to China and Russia

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The Biden administration has imposed recent restrictions on sales of some sophisticated computer chips to China and Russia, the U.S. government’s latest try and use semiconductors as a tool to hobble rivals’ advances in fields resembling high-performance computing and artificial intelligence.

The brand new limits affect high-end models of chips generally known as graphics processing units, or GPUs, that are sold by the Silicon Valley corporations Nvidia and Advanced Micro Devices. Such products were originally developed to render images in video games but prior to now decade were widely deployed in the biggest supercomputers utilized by scientists and by web corporations for applications resembling recognizing speech and objects in photographs.

Supercomputers are utilized in applications that include weapons development and intelligence gathering, and a few large systems in China have been linked to surveillance of the country’s Muslim minorities. A.I. technology can also be increasingly getting used for purposes resembling identifying faces in video images.

The restrictions are a part of a chilly war between China and the US for primacy in advanced technologies. The Biden administration, constructing on limits begun under former President Donald J. Trump, has adopted measures geared toward restricting access by corporations resembling China’s Huawei to advanced chips and foreign semiconductor manufacturing. China has designed many chips by itself, but generally relies on factories in Taiwan to fabricate essentially the most advanced models.

In statements on Wednesday, Nvidia and AMD acknowledged the brand new restrictions.

Nvidia, by far the biggest GPU maker, said the federal government would now require it to hunt export licenses to sell two high-end chips used with server systems in data centers. The federal government said the brand new requirement would address the chance that those products could be utilized in, or diverted to, a military use in China and Russia, in keeping with the corporate.

Nvidia has many purchasers in China, but doesn’t currently sell to Russia. It said the brand new measures affected a business that generated about $400 million in revenue in its most up-to-date fiscal quarter.

AMD said the measures appeared to affect sales of one among its high-end GPUs to China and Russia. It said it didn’t consider the restrictions would have a fabric effect on its business.

The scope of the federal government’s actions appears to transcend Nvidia and AMD. Other corporations that make tool or design software have received similar letters in recent weeks informing them that the high-end technologies they export to China have been restricted, in keeping with an individual accustomed to the situation, who asked to stay anonymous with a view to discuss private deliberations.

A spokesman for the Commerce Department said it was conducting a review of policies related to China and might adopt recent measures to maintain advanced technologies out of the incorrect hands.

Without commenting on the chip restrictions specifically, the spokesman said possible future steps include “stopping China’s acquisition and use of U.S. technology within the context of its military-civil fusion program to fuel its military modernization efforts, conduct human rights abuses and enable other malign activities.”

In the previous couple of years, the Commerce Department’s Bureau of Industry and Security has tightened restrictions on supplying certain U.S. technologies to China, arguing that the products were being sold through civilian supply chains but ultimately went toward military uses, like weapons, aircraft and surveillance technology. Corporations can request a license to sell restricted items to specific customers, but most of those applications are denied.

Nvidia’s and AMD’s statements indicated that they didn’t expect licenses to be granted usually. AMD said it expected the measures to “prevent” the sale of a product called the MI250 to China and Russia.

Nvidia said the measures affected an existing product, the A100, in addition to a product that is predicted to be available later this 12 months, the H100. It added that the restrictions might hurt its ability to finish development of the H100 in a timely manner or support existing customers of the A100, and might require the corporate to transition certain operations out of China.

The measures come at a troublesome time for Nvidia. Demand for GPUs utilized in video game play and in cryptocurrency mining has dropped sharply, and in early August, Nvidia posted quarterly revenue that was well below what it had forecast in May.

Nvidia’s stock fell greater than 6 percent late Wednesday after it confirmed the brand new government restrictions, which had been the topic of earlier articles in Chinese news outlets.

Paul Mozur contributed reporting.

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