U.S. curbs export of more AI chips, including Nvidia H800, to China

Key Points

• Expansion of Restrictions: The new restrictions build upon previous measures that banned the sale of Nvidia’s H100 processor, a popular choice for AI firms in the U.S. The earlier restrictions allowed Chinese companies to purchase a slightly slowed-down version known as the H800 or A800 to comply with U.S. regulations. However, these new rules intend to ban these alternative chips as well.
• Impact on Chip Stocks: The news of the expanded restrictions had a significant impact on chip stocks, causing share prices to drop. Nvidia’s shares fell approximately 5%, while Broadcom and Marvell saw declines of about 2%. AMD shares dropped more than 3%, and Intel’s shares fell by around 1.5%.
• Concerns and Objectives: The primary objective of these restrictions is to limit Chinese access to advanced semiconductors that could potentially be used for military purposes or in the development of breakthroughs in artificial intelligence. U.S. officials have emphasized that the restrictions are not intended to harm Chinese economic growth but rather to safeguard U.S. national security interests.
• Details of Restrictions: The new rules focus on controlling access to computing power. The U.S. government plans to restrict the export of data center chips if they surpass specified performance thresholds. Companies seeking to export AI chips to China or other embargoed regions will be required to notify the U.S. government.
• Expansion of the Restricted List: In addition to restricting AI chips, U.S. officials plan to expand the list of semiconductor manufacturing equipment that is subject to these restrictions. The aim is to further limit China’s access to semiconductor manufacturing technology.
• Loophole Closure: The U.S. government is taking steps to close loopholes related to the shipment of chips to companies headquartered in China or other embargoed regions, preventing the use of foreign subsidiaries to bypass export controls.
• Limited Impact on Chip Exports: U.S. Commerce Secretary Gina Raimondo emphasized that the new restrictions would only affect a small fraction of chip exports to China. She mentioned that, despite the update in rules, China would continue to import hundreds of billions of dollars’ worth of semiconductors from the United States.
• Timeline for Implementation: The rules will undergo a 30-day public notice period before taking effect, allowing stakeholders and the public to provide input and feedback on the regulations.