The Biden administration plans to halt shipments of more advanced artificial intelligence chips designed by Nvidia and others to China. The new restrictions, part of a raft of measures released on Tuesday, seek to stop Beijing from receiving cutting-edge U.S. technologies to strengthen its military. The rules, which go into effect in 30 days, restrict a broader swathe of advanced chips and chipmaking tools to a more significant number of countries, including Iran and Russia, and block Chinese chip design firms such as Moore Threads and Biren. The restrictions also target the ability of Chinese companies to evade export controls by routing orders through foreign affiliates or subsidiaries.
The new restrictions will apply to hardware and software used in data centers for AI training and the development of computer graphics processors for video games and virtual reality. In a separate move, the U.S. Commerce Department will require a license to export chip manufacturing equipment to 21 countries outside China. The move expands on a similar set of restrictions that were first imposed last year. The administration aims to limit access to “advanced semiconductors that could fuel breakthroughs in artificial intelligence with military applications.” Commerce Secretary Gina Raimondo said the updates did not hurt Chinese economic growth.
Both moves further escalate tensions between the world’s two biggest economies as the Trump administration escalates its efforts to curb China’s technological and military rise. While the White House has sought to balance its anti-China zeal with efforts to maintain trade ties as both countries teeter on the edge of recession, many lawmakers and business leaders want to see more action.
China’s Foreign Ministry accused Washington of pursuing technology hegemony and demanded that the United States immediately revoke the new restrictions. It added that it would firmly safeguard its development rights and interests. Beijing has reacted angrily to previous U.S. export restrictions on chipmakers but typically does not take any retaliatory actions.
Nvidia, one of the leading suppliers of A.I. chips to China, is not directly impacted by the latest measures because it has already developed workarounds for the original restrictions. But it has been told to expect additional requests from the U.S. government for information related to sales in China. The new rules also limit how much computing power can be packed into a chipset, an attempt to prevent workarounds by using multiple chips in tandem.
Nvidia, which had worked around the initial restrictions by distributing its hardware in a way that allowed it to pass inspections, will now have to apply for a license to ship products to China, as will other American manufacturers that distribute their technology to Chinese customers through Nvidia’s global network of distributors. The U.S. is also imposing increased scrutiny of the ability of Chinese companies to evade the restrictions by routing their orders through countries like the UAE and Saudi Arabia, which the administration has flagged as potential transit points for evading export controls.