Nvidia and AMD have asked to stop selling artificial intelligence to China

By Michelle Toh, CNN Business

Two of America’s top chipmakers have been ordered to stop selling some of their technology that can be used for artificial intelligence to China.

Nvidia and AMD announced on Wednesday that they had been ordered by the US government to halt exports of certain high-performance chips to the world’s second largest economy.

In a regulatory filing, Nvidia said it was told by US officials that the requirement was due to a potential risk that the products would be used by or diverted to a “military end user.”

The restrictions will apply immediately to Nvidia’s A100 and upcoming H100 integrated circuits and any systems containing them, it said.

China urges US to drop tech export restrictions after Nvidia chips warning

According to the filing, the move threatens to turn Nvidia’s $400 million business upside down.

That’s about what the California-based tech giant forecast last week in terms of potential sales to China that could be affected by the new requirement, the filing says.

Nvidia shares are down 6.6% after the close on Wednesday, while AMD shares are down 3.7%.

In a statement to CNN Business, Nvidia said it is working with “customers in China to satisfy their planned or future purchases with alternative products and may seek licenses if replacements are not sufficient.”

AMD, which is also headquartered in California, told CNN Business that it has also received new requests from the US Department of Commerce to ship its MI250 integrated circuits to China.

“At this stage, we do not believe that MI100 integrated circuit supplies will be affected by the new requirements,” it said in reference to another line of components. “We currently do not believe it is a material impact on our business.”

The new rules are a reminder that tensions between the US and China over business and technology remain high.

Last week, a rare agreement between the two countries to audit US-listed Chinese companies had suggested a breakthrough in ties, but experts have warned the deal will do little to resolve other key issues.

The new mandate for chipmakers also includes an export ban to Russia, Nvidia and AMD noted.

Both companies said they currently do not sell any products to Russia.

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