US Tightens AI Chip Export Restrictions to China: New Measures to Control Technology Transfer

Recent actions by the Biden administration have significantly impacted U.S. chipmaking leaders, particularly Nvidia and AMD, by imposing stricter export regulations for AI chips destined for China. The U.S. Bureau of Industry and Security, part of the Department of Commerce, announced these new rules, which build on previous restrictions established in October. The latest regulations extend licensing requirements for those exporting AI chips, aiming to prevent high-performance semiconductor technology from reaching China, businesses in Macau, and other countries suspected of reselling to China. National security concerns have been cited as the driving force behind these measures.

These revisions to export policy also introduce stringent due diligence protocols, making it more challenging for companies to navigate compliance. Additionally, two Chinese AI chip manufacturers—Shanghai Biren Intelligent Technology Co. and Moore Threads Intelligent Technology Beijing Co.—along with their subsidiaries, have been placed on a trade restriction list, further complicating their operational landscape.

The expansion of these restrictions hit major chipmakers hard, leading to declines in the stock prices of Nvidia, AMD, and Intel. Among them, Nvidia is poised to face the most significant long-term consequences. The new regulations prohibit Nvidia from exporting certain versions of its flagship chips that are tailored for the Chinese market. To adapt to previous restrictions, Nvidia had developed the A800 and H800 chips—slower variants of the A100 and H100 GPUs—but the latest rules aim to eliminate any circumvention strategies that might allow these products to be sold in China.

In anticipation of these tighter controls, Chinese customers have proactively stockpiled the 800-series chips, hastening their purchasing activities, as reported by Bloomberg Intelligence analyst Kunjan Sobhani.

These heightened export limitations arrive at a time when Nvidia, alongside other semiconductor companies, is witnessing a surge in demand spurred by the growing generative AI sector. According to research from Omdia, Nvidia shipped an impressive 900 tons of its H100 flagship chips in the second quarter alone.

Reflecting on the implications of these policies, CEO Jensen Huang expressed concerns earlier this year, stating that the newly established rules left Nvidia’s operations constrained and suggested that further limitations could jeopardize the competitiveness of American chipmakers. However, in reaction to the recent regulatory changes, Nvidia maintained its position, indicating to industry analysts that it does not foresee any immediate significant impact on its financial performance, attributing this stability to sustained global demand for its technology.