The United States government is reportedly planning to introduce additional measures to prevent Chinese developers from obtaining artificial intelligence (AI) semiconductor chips made in the US through third parties. The move aims to close a loophole that has allowed Chinese developers to purchase chips from the Huaqiangbei electronics area in Shenzhen, China. The new rules, expected to be announced this month, will extend restrictions already applied to major US chip manufacturers to all companies in the market. This comes as the US government has sought to limit chip exports to certain countries, including the Middle East.
Cracking Down on Chinese Access to AI Chips
The Biden administration is taking steps to address the issue of Chinese developers gaining access to AI chips made in the US. An upcoming set of rules will target a loophole that has enabled these developers to purchase chips from a popular electronics area in Shenzhen, China. The new rules, which are expected to be announced this month, will expand restrictions on AI chips to all companies producing similar materials in the market.
Extending Restrictions to All Companies
The US government has previously imposed restrictions on its top chip manufacturers, such as Nvidia and AMD, but the new rules will apply these restrictions more broadly to the entire market. This move is aimed at preventing Chinese developers from accessing AI chips made in the US through third parties. The US government has been tightening measures on chip exports, including restricting exports to certain countries in the Middle East.
Nvidia's Concerns and Warning
Nvidia, one of the leading chip manufacturers in the US, has expressed concerns about the potential impact of these restrictions. The company has warned that its long-term revenue could be negatively affected if it is effectively excluded from the Chinese market. Nvidia generates a significant portion of its revenue from the US, China, and Taiwan, with less than 14% coming from other countries combined.
Troubleshooting Access to Cloud Service Providers
In addition to targeting AI chips, the Biden administration is also looking into closing a loophole that allows Chinese parties to access US cloud service providers like Amazon Web Services (AMS). However, finding a solution to this issue is proving to be more challenging. The US government has been considering restrictions on Chinese companies' access to cloud computing services since July, as part of efforts to protect advanced technology.
China's Response to US Measures
China has responded to the tightening measures from the US by announcing its own restrictions on exports of gallium and germanium, two primary materials used in the production of AI chips. These moves reflect the ongoing tensions between the US and China in the field of technology.
