The United States is contemplating additional measures to prevent Chinese developers from accessing U.S.-made artificial intelligence (AI) semiconductor chips through third parties.
Reuters reported on October 13 that the Biden administration is targeting a loophole that has allowed Chinese developers to purchase processors from the infamous Huaqiangbei electronics district in the southern Chinese city of Shenzhen.
According to the sources, the additional rules on AI chips will be released this month. They will apply restrictions previously applied only to the United States’ major players, such as Nvidia and AMD, to all companies producing similar materials on the market.
During the summer, the U.S. government imposed additional regulations on its main chip manufacturers, including Nvidia, the market leader in chip production. Among other minor details, it requested that the companies restrict exports of their high-level semiconductor processors to “some” Middle Eastern nations.
U.S. regulators have since denied explicitly prohibiting exports of AI chips to the Middle East.
Nvidia warned regulators that the company’s long-term revenue results could be “harmed” if it is “effectively excluded from all or part of China.” The United States, China, and Taiwan account for most of Nvidia’s revenue, while less than 14% originates from all other countries combined.
According to Reuter’s sources, the Biden administration is also attempting to close a loophole that grants Chinese parties access to American cloud service providers such as Amazon Web Services (AWS). The report indicates that these solutions need to be clearer.
U.S. officials reportedly began considering restrictions on Chinese firms’ access to cloud computing services such as AWS to safeguard the country’s advanced technology in July.
In October 2022, the United States implemented its first export controls on its most potent semiconductor chip technology.
Since then, Washington has increased restrictions and is still considering additional measures to restrict further the computing capacity of chips available on the Chinese market.
China has also responded to the United States ever-tightening measures. In July, the government announced that it would regulate exports of gallium and germanium, two essential materials for manufacturing AI processors.
