According to a report from Reuters, unnamed sources cited by the Wall Street Journal on June 27 suggested that the Biden administration is considering implementing new sanctions on exports of artificial intelligence chips to China. The rationale behind this potential action arises from concerns that China might use these chips, produced by Nvidia and other companies, for weapons development and cyberattacks.
The Wall Street Journal further suggested that the U.S. Department of Commerce could demand a cessation of chip product deliveries to Chinese customers from companies like Nvidia as early as July. The report also implied that U.S. chip manufacturers such as Nvidia, Micron, and AMD might be affected by these new measures being contemplated by the Biden administration. Upon the news, Nvidia's stock price fell more than 2% in after-hours trading, while AMD's stock price dropped by around 1.5%.
This wouldn't be the first time the U.S. has sanctioned the export of artificial intelligence chips to China. The report mentioned that Nvidia had previously announced in September of last year that U.S. officials requested the company stop exporting two top-tier computational chips for AI to China. To comply with export control regulations, Nvidia later stated that they would provide a "downgraded" chip known as A800 to China. Additionally, earlier this year, the company adjusted its flagship H100 chip to comply with regulations.
The Wall Street Journal reported on June 13 that the U.S. Deputy Secretary of Commerce for Industry and Security, Alan Estevez, indicated at an industry conference last week that the Biden administration plans to extend an exemption period for an export control policy. This policy aims to limit U.S. and foreign companies utilizing U.S. technology from selling advanced process chips and chip manufacturing equipment to China. Some analysts believe this move will undermine the effectiveness of U.S. export controls on China in the chip sector.
Experts interviewed by the Global Times on June 13 believed that although specific details have not yet been announced, the "extension exemption" was expected because various U.S. measures to contain China's chip development have had limited effect and even backfired.
In response to U.S. restrictions on chip exports to China, the Chinese Foreign Ministry has previously stated that the U.S., in an attempt to maintain its tech hegemony, has been abusing export control measures, maliciously blocking, and suppressing Chinese enterprises. This practice strays from principles of fair competition and violates international trade rules. It harms not only the legitimate rights and interests of Chinese enterprises but also affects U.S. businesses.
This practice impedes international tech exchanges and trade cooperation and could disrupt the stability of global supply chains and hinder world economic recovery. The ministry claimed that the U.S. could not stop China's development by politicizing, weaponizing, and using tech and trade issues as tools, but would only end up isolating and harming itself.
