U.S. Chipmakers Banned from Selling AI Chips to Communist China

On August 31st, Nvidia and AMD announced that the U.S. Government had ordered them to stop exporting two top-of-the-line computing chips to communist China for artificial intelligence (AI) work. The move could cripple the ability of Chinese Communist Party (CCP)-backed companies to do advanced work such as image recognition.

Shares of Nvidia and AMD both fell after hours. Nvidia said the ban affects the A100 and H100 chips, which are designed to accelerate machine learning tasks, and could interfere with the completion of development of the flagship H100 chip, which Nvidia announced this year. AMD noted that the new requirements from the U.S. Department of Commerce also affected shipments of its MI250 integrated circuits to communist China.

The Commerce Department emphasized that the new rules would mitigate the risk that covered products could be used or diverted to “military end-uses” or “military end-users” in communist China.

The announcement marks a significant escalation in the U.S. crackdown on the CCP’s technological capabilities, and without AI chips from companies such as Nvidia, the CCP-backed agencies would not be able to effectively perform advanced computing for image and speech recognition, among many other tasks.