US Regulators Orders Nvidia to Suspend AI Chips Export to Middle East
The demand for artificial intelligence (AI) computing services has drastically increased in readiness for the upcoming Bitcoin halving. The increase in demand has positioned the AI chip manufacturer at a central point to blossom. Despite the booming market for AI chips, the US official has expressed concerns with the export volumes of the mining machineries.
On Monday, August 28, the US regulatory agencies issued a joint report warning Nvidia, a software company specializing in mining chips manufacturing, of the risk of exporting the mining machines. In the statement, the regulators urged the Nvidia group to suspend exporting mining chips to the Middle East.
US Imposes New Regulation on AI Chip Export
Responding to the new provision, the Nvidia team admitted that the new rule will affect its latest version of the AI chips A100 and H100 chips. The software company stated that its latest upgrades aimed at increasing the speed of machine learning.
In the letter, the regulators underscored that the new provision would have minimal “immediate material impact” on Nvidia. It implies that the new regulation will not interfere with Nvidia’s revenue streams. The regulator admitted to presenting the provision to the US authority to join forces in addressing the matter.
The report also stated that the current rules the US has imposed on the export of AI chips to China. Commenting on this, the Nvidia team admitted that the previous regulation allowed the chip manufacturer to sell products of low power levels, such as A800 and H800 chips to China.
Despite the restrictive measures imposed by the US on China, the Nvidia team regretted that the regulation could have long-term harm to the industry. The Nvidia team opposed the suspension of the AI chip export to China.
Referring to the last fiscal quarter report, the company generated a revenue of $13.5 billion. The report indicated that most of the sales were from China, the US, Taiwan, and approximately 13.9% were generated from other parts of the world.
China and US Safeguards Resources
Reportedly, the regulators warned Nvidia’s top rival, Advanced Micro Devices (AMD), to stop exporting mining chips to the Middle East. The restrictive measures were imposed by the Biden administration aiming at disassociating countries in the Middle East from revolutionary semiconductor chips. The provision aimed at positioning US a global innovation hub.
Earlier in June, the policymaker in Washington revisited the rules on AI chip export to China and announced plans to adopt stringent measures on the rules.
Interestingly, the Chinese authority reacted to the US regulation and implemented restrictive measures on the export of gallium and germanium, which are used to manufacture AI chips. The attempt to safeguard resources by imposing restrictive measures on exporting AI chips to China and the US has compelled other UK and European countries to consider taking proactive steps.
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