New U.S. Rule on AI Chips for Chinese Companies

Investing.com–The U.S. government is preparing to introduce a new rule aimed at restricting Chinese companies' access to advanced artificial intelligence (AI) chips through third-party countries, as reported by the South China Morning Post (SCMP) on Thursday, citing unnamed sources.

Export Control Measures

The proposed export control measure, expected by the end of December, will target global shipments of high-performance graphics processing units (GPUs) critical for AI model training. This initiative aims to close loopholes in existing regulations, helping the U.S. maintain its leadership in AI technology.

Increasing Restrictions

The rule, which has yet to be finalized, would mark a significant escalation in chip-related restrictions following a recent wave of U.S. sanctions. Earlier in the month, the Biden administration blacklisted 140 Chinese semiconductor firms and banned the sale of high-bandwidth memory chips to China. Beijing retaliated by restricting U.S.-bound exports of essential minerals like graphite and launching an antitrust investigation into Nvidia.

Proposed Measures

The new rule, drafted with input from U.S. Secretary of Commerce Gina Raimondo and National Security Adviser Jake Sullivan, is expected to include:
– Country caps on GPU shipments.
– A global licensing system with reporting requirements.

These provisions aim to prevent Chinese firms from circumventing export controls via countries like Singapore and Malaysia, which are key hubs for GPU smuggling.

Smuggling Networks

Smuggling networks have reportedly grown sophisticated, with individuals transporting GPUs into mainland China piece by piece, creating a black market for sought-after chips like Nvidia's RTX 4090. The price of this consumer-grade GPU has surged recently due to supply constraints.

Nvidia's Position

NVIDIA Corporation (NASDAQ: NVDA) stated that it is ready to cooperate with the U.S. government regarding these changes.