Us Officials Order Nvidia To Stop Sales Of Top Ai Chips To China

Aug 31 (Reuters) – Chip designer Nvidia Corp ( NVDA.O ) said on Wednesday that U.S. officials had told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple the ability of Chinese companies to perform advanced functions such as image recognition and hinder Nvidia’s business in China. Shares of Nvidia fell 6.6% after hours. The company said the ban, which affects the A100 and H100 chips designed to speed up machine learning tasks, could hinder the completion of development of the H100, chip maker Nvidia announced this year. Shares of rival Nvidia Advanced Micro Devices Inc ( AMD.O ) fell 3.7 percent after hours. An AMD spokesman told Reuters the company received new license requirements that will stop the export of its MI250 AI chips to China, but believes its MI100 chips will not be affected. AMD said it does not believe the new rules will have a significant impact on its business. Sign up now for FREE unlimited access to Reuters.comSign up Nvidia said US officials told it the new rule “will address the risk that covered products will be used or diverted to a ‘military end use’ or ‘military end user’ in China.” Asked for comment, the U.S. Commerce Department did not say what new criteria it has set for AI chips that can no longer be shipped to China, but said it is reviewing its policies and practices related to China “keeping advanced technologies away from the wrong hands. “While we are unable to outline specific policy changes at this time, we are taking a comprehensive approach to implementing additional actions necessary on technologies, end uses, and end users to protect the national security of the U.S. and foreign policy interests. ” a spokesman told Reuters. The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith
The announcement marks a major escalation in the U.S. crackdown on China’s technology capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and nearly every other major chip company are made. Without American chips from companies like Nvidia and AMD, Chinese organizations won’t be able to afford the kind of advanced computing used for image and speech recognition, among many other tasks. Image recognition and natural language processing are common in consumer applications such as smartphones that can answer queries and tag photos. They also have military uses, such as scanning satellite images for weapons or bases and filtering digital communications for intelligence gathering purposes. Nvidia said it had booked $400 million in sales of the affected chips this quarter in China that could be lost if Chinese companies decide not to buy alternative Nvidia products. He said he plans to apply for exceptions to the rule, but has “no assurance” that US officials will grant them. Stacy Rasgon, an economic analyst at Bernstein, said the disclosure signaled that about 10 percent of Nvidia’s data center sales, which investors have closely watched in recent years, came from China, and that the hit to sales was likely ” manageable’ for Nvidia. “It doesn’t change the (investment) thesis, but it’s not a good look,” Rasgon said. “What happens now on both sides is the question,” he said of potential future escalations. The chip ban comes as Nvidia last week already forecast a sharp drop in revenue for the current quarter due to a weaker gaming industry. Nvidia said it expects sales of $5.90 billion for the third quarter, down 17 percent from the same period last year. Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Eva Mathews and Nivedita Balu in Bengaluru, Stephen Nellis and Jane Lee in San Francisco, Karen Freifeld in New York and Alexandra Alper in Washington. Edited by David Gregorio and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles.

title: “Us Officials Order Nvidia To Stop Sales Of Top Ai Chips To China Klmat” ShowToc: true date: “2022-11-29” author: “Justin Juba”

Aug 31 (Reuters) – Chip designer Nvidia Corp ( NVDA.O ) said on Wednesday that U.S. officials had told it to stop exporting two top computing chips for artificial intelligence work to China, a move that could cripple the ability of Chinese companies to perform advanced functions such as image recognition and hinder Nvidia’s business in China. Shares of Nvidia fell 6.6% after hours. The company said the ban, which affects the A100 and H100 chips designed to speed up machine learning tasks, could hinder the completion of development of the H100, chip maker Nvidia announced this year. Shares of rival Nvidia Advanced Micro Devices Inc ( AMD.O ) fell 3.7 percent after hours. An AMD spokesman told Reuters the company received new license requirements that will stop the export of its MI250 AI chips to China, but believes its MI100 chips will not be affected. AMD said it does not believe the new rules will have a significant impact on its business. Sign up now for FREE unlimited access to Reuters.comSign up Nvidia said US officials told it the new rule “will address the risk that covered products will be used or diverted to a ‘military end use’ or ‘military end user’ in China.” Asked for comment, the U.S. Commerce Department did not say what new criteria it has set for AI chips that can no longer be shipped to China, but said it is reviewing its policies and practices related to China “keeping advanced technologies away from the wrong hands. “While we are unable to outline specific policy changes at this time, we are taking a comprehensive approach to implementing additional actions necessary on technologies, end uses, and end users to protect the national security of the U.S. and foreign policy interests. ” a spokesman told Reuters. The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California February 11, 2015. REUTERS/Robert Galbraith
The announcement marks a major escalation in the U.S. crackdown on China’s technology capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and nearly every other major chip company are made. Without American chips from companies like Nvidia and AMD, Chinese organizations won’t be able to afford the kind of advanced computing used for image and speech recognition, among many other tasks. Image recognition and natural language processing are common in consumer applications such as smartphones that can answer queries and tag photos. They also have military uses, such as scanning satellite images for weapons or bases and filtering digital communications for intelligence gathering purposes. Nvidia said it had booked $400 million in sales of the affected chips this quarter in China that could be lost if Chinese companies decide not to buy alternative Nvidia products. He said he plans to apply for exceptions to the rule, but has “no assurance” that US officials will grant them. Stacy Rasgon, an economic analyst at Bernstein, said the disclosure signaled that about 10 percent of Nvidia’s data center sales, which investors have closely watched in recent years, came from China, and that the hit to sales was likely ” manageable’ for Nvidia. “It doesn’t change the (investment) thesis, but it’s not a good look,” Rasgon said. “What happens now on both sides is the question,” he said of potential future escalations. The chip ban comes as Nvidia last week already forecast a sharp drop in revenue for the current quarter due to a weaker gaming industry. Nvidia said it expects sales of $5.90 billion for the third quarter, down 17 percent from the same period last year. Sign up now for FREE unlimited access to Reuters.comSign up Reporting by Eva Mathews and Nivedita Balu in Bengaluru, Stephen Nellis and Jane Lee in San Francisco, Karen Freifeld in New York and Alexandra Alper in Washington. Edited by David Gregorio and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles.