The United States wants to impose restrictions on exports of artificial intelligence chips to China

The United States wants to restrict exports of artificial intelligence chips to rival China over concerns about AI-powered weapons.

Artificial intelligence has the potential to reshape countries and give them an edge against their competitors. It can upgrade healthcare, education, the environment and even the military.

US AI chips require a license

According to The Wall Street Journal sourcesThe Biden government will require chip makers to obtain a license to export AI chips to other countries, specifically China. The new rule may go into effect from next month, likely after Treasury Secretary Janet Yellen’s visit to China.

The move comes as the government worries about competitors using the technology for hacking and weapons development. The US has already imposed restrictions on AI chips since October 2022.

However, the new rules will add more to October’s restrictions.

Due to last year’s restrictions, Nvidia has been unable to export its A100 chips. Hence, the company has made slightly less powerful A800 chips for the Chinese market. But the new rules may also restrict the sale of A800 chips.

Besides restrictions on AI chips, the US also wants to limit cloud services to AI companies in China. Companies often use cloud services to reduce reliance on GPUs.

The impact of the new rules on Nvidia

Due to the boom in artificial intelligence, Nvidia became the first chip maker to reach $1 trillion in market value and became the first chip maker to achieve this feat. But many expect that such restrictions may affect its financial results.

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However, Nvidia’s chief financial officer, Colette Kress, believes the stricter rules won’t affect the balance sheet right away. she He said:

“We do not anticipate that such additional restrictions, if adopted, will have an immediate material impact on our financial results.”

But Chris argues that US restrictions on AI chips will lead to a permanent loss of opportunity for US industry. Speaking at the investor conference:

“In the long term, restrictions prohibiting the sale of data center GPUs to China will result in a permanent loss of opportunities for the US industry to compete and lead in one of the largest markets in the world and impact our future business.”

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