US considers new chip ban on China

The Biden administration is considering new export restrictions on AI chips to China, according to a WSJ source. Starting next month, the US Commerce Department could ban Nvidia and other domestic chipmakers from selling AI chips to customers in China and other countries of concern without a license.

An Nvidia graphics processing chip. (Photo: Bloomberg)

It would expand export controls the US announced in October 2022. The move would further hamper China’s ability to build AI capabilities, which have already been cut off from the most powerful chips from Nvidia and AMD.

Nvidia previously developed a version of its AI chip for the Chinese market called the A800, which performed below the threshold set by the Commerce Department. It replaced the A100, a chip widely used in data centers. Under the new rules, even the A800 chip cannot be sold to Beijing without a license.

According to WSJ, the US government is also considering restricting cloud services for Chinese AI companies.

The timing of deployment is uncertain as chipmakers continue to lobby the administration to waive or ease the ban. With the proliferation of generative AI tools like ChatGPT, U.S. officials and policymakers are looking at AI through the lens of national security. AI-powered weapons could give U.S. adversaries an advantage on the battlefield. Meanwhile, AI tools could be used to create chemical weapons or write malicious computer software.

Still, protecting critical technology while ensuring minimal impact on US and allied businesses is a major challenge.

The US Commerce Department announced a series of export controls on advanced semiconductors and chipmaking tools in October 2022, but has yet to issue formal regulations to codify the rules. Since last fall, the administration has been soliciting comments from affected companies and negotiating with allies to come up with final rules.

The US has convinced the Netherlands and Japan – two of the world’s leading manufacturers of chipmaking machinery – to join it and agree on a list of controlled items. South Korean and Taiwanese chipmakers will be allowed to continue operating and expanding factories in China, but only on older chips. The Biden administration is also considering an executive order that would ban US investment in China and its rivals.

(According to WSJ)

Semiconductor diplomacy is flourishing, US companies are 'spending money' to diversify their supply chains . Semiconductor diplomacy is attracting US tech giants to spend billions of dollars on factories abroad, in the context of US-China tensions showing no signs of cooling down.

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