US Chip Ban Forces Chinese Firms To Make Do Without Crucial Tech

Story from Daily Caller

Chinese firms that relied on advanced American chips for artificial intelligence research may be forced to do without after American chipmakers disclosed new regulations imposed by the U.S. government restricting the sale of their most advanced chips to China, Reuters reported.

The new regulations restrict the sale of Nvidia’s A100 and H100 AI chips, alongside competitor Advanced Micro Devices’ (AMD) MI250, which have applications ranging from language processing in consumer cellphones to satellite image processing and signal filtering for military intelligence applications, according to Reuters. Buyers of the A100 chip include the National University of Defense and Technology, a self-described “military university” under the control of the Chinese military, alongside a slew of other government-affiliated institutions and universities, Reuters reported. 

Despite the fact that China produces most of the world’s semiconductors, domestic firms are unable to produce the advanced chips necessary for AI research like their American counterparts, according to Reuters. Aside from high-end chips, public records show a reliance on less advanced chips from Nvidia and U.S.-based chipmaker Intel across an array of Chinese research institutions, Reuters reported.

Affected Chinese organizations may be forced to utilize cloud technology to develop their AI research on servers operated by Google or Amazon, before exporting the relevant software back to China, Reuters reported. Alternatively, a large number of weaker chips not affected by the new regulations could stand in for smaller collections of more powerful chips, according to Reuters.

In October 2021, Tsinghua University, the highest-ranked university in China globally, spent $400,000 on a pair of supercomputers, powered by a combined eight A100 chips, according to Reuters. Also in October 2021, a pair of colleges affiliated with the Chinese Academy of Sciences spent a combined $450,000 on a series of computers for artificial intelligence research, powered at least in part by A100 chips, Reuters reported.

Nvidia had $400 million in outstanding “potential sales” to Chinese customers as of last Wednesday, according to the Nvidia quarterly report that revealed the new regulations. Nvidia told the Daily Caller News Foundation in a statement that it was working with Chinese customers to find replacement products, and if that was insufficient, seeking exemptions from the U.S. government, reiterating a statement it gave when the news broke last week.

Nvidia said that the regulations may force the transition of “certain operations out of China,” according to its quarterly report.