Nvidia will now need a special license to export two of its AI chips to China.
On Aug. 31, the chipmaker revealed in an SEC regulatory filing that the U.S. government now requires a special license for it to export its A100 and next-generation H100 chips to China or Russia.
The U.S. government told Nvidia that new license requirement will "address the risk that the covered products may be used in or diverted to a 'military end use' or 'military end user' in China and Russia," according to the filing.
The AI hardware and software vendor had previously warned customers that the U.S. government requirement will hamper the development of its H100 chip -- the vendor's next-generation, highest-end AI chip that's expected to be released later this year.
However, in an updated filing on Thursday, Nvidia revealed that the U.S. is authorizing exports, reexports and transfers that are needed to continue the development of H100 through March 1, 2023. This allows Nvidia to perform the exports needed to support U.S. customers that use A100 chips. The U.S. is also allowing A100 and H100 order fulfillment through next September, which means Nvidia can ship to customers outside China from Hong Kong.
Nvidia is not the only chipmaker now required to have a special license to export chips to China. Advanced Micro Devices (AMD) also received license requirements needed to export its M123O AI chips to China.
The new requirements comes as tensions escalate between the U.S. and China, especially after House Speaker Nancy Pelosi visited Taiwan in August. It also comes after Secretary of State Antony Blinken spoke about the need for the U.S. to step up its competitiveness with China.
"We're going to see more export controls tighten up over time as tensions continue to escalate," said R. "Ray" Wang, founder and analyst at Constellation Research.
Ray WangAnalyst, Constellation Research
The new requirement will keep China from getting access to a lot of advanced GPUs since they're not available in China today, Wang said. The GPUs are used for applications including photography and AI.
In the past, China was using the GPUs for video games and crypto mining. However, now the U.S. is afraid of China using the chips for nefarious reasons, Wang said. This keeps China from continuing to repurpose GPUs for applications that counter U.S. interests through espionage, satellites and surveillance.
The U.S. is also afraid that Russia may be able to gain access to the chips, even though both Nvidia and AMD claim they do not sell to Russia.
The new restriction is also a way for the U.S. to maintain its competitive values, Wang said.
"They don't want China to try to reverse engineer these GPU chips," he said.
In a statement responding to the news, Nvidia said "We are working with our customers in China to satisfy their planned or future purchases with alternative products and may seek licenses where replacements aren't sufficient."