NEW YORK: The United States is considering new restrictions on exports of artificial intelligence (AI) chips to China, the Wall Street Journal has reported, citing people familiar with the matter.
Shares of Nvidia fell more than 2%, while Advanced Micro Devices (AMD) fell about 1.5% on the news in extended trading.
Reports have said that China’s massive demand for advanced semiconductors to power new AI development projects has created a fast-growing market for smuggled graphics processing units or GPUs, such as the A100 and H100 devices from Nvidia Corp, according to industry insiders.
It is an under-the-counter trade that has apparently prospered.
The Commerce Department will stop the shipments of chips made by Nvidia and other chip companies to customers in China as early as July, the report said.
Nvidia, Micron and AMD are among the US chipmakers caught in the crossfire between China and the Biden administration.
In September, Nvidia had said that US officials asked the company to stop exporting two top computing chips for AI work to China.
Months later, Jensen Huang-led Nvidia said it will offer a new advanced chip called the A800 in China to meet export control rules.
The company also tweaked its flagship H100 chip early this year to comply with regulations.
But the new curbs being mulled by the department would ban the sale of even A800 chips without a special US export licence, the report added.
The Commerce Department did not immediately respond to a Reuters request for comment. — Reuters
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