BEIJING, October 16 (TMTPost)— The Biden administration may soon tighten up export controls on chips, especially those involving artificial intelligence (AI) sector, despite Beijing’s serious warning.

Credit：Visual China

The United States will update its restrictions on shipments of advanced chips and chipmaking equipment to China launched last October, targeting workarounds that enable China bypass export controls to acquire American products, Reuters reported, citing a U.S. official. The new rules were said to draw up to block some AI chips hat fall just under current technical parameters while demanding companies report shipments of others. The rules could be announced as early as this week, while the U.S. Department of Commerce, which takes in charge of export controls, declined to comment.

The report came two days after a separate Reuters report said the U.S. government is weighing closing a loophole that gives Chinese companies access to U.S. AI chips through overseas units.

China opposes US politicizing, instrumentalizing and weaponizing trade and tech issues, and will closely follow the developments and firmly safeguard our legitimate rights and interests, Chinese Foreign Ministry spokesperson Wang Wenbin commented last Friday. Arbitrarily placing curbs or forcibly seeking decoupling to serve political agenda violates the principles of market economy and fair competition, undermines the international economic and trading order, disrupts and destabilizes global industrial and supply chains and will eventually hurt the interests of the whole world, Wang said.

The reported new restrictions are by no means hitting American chip giants including Nvidia, the semiconductor designer that dominates the market for AI chips. Nvidia became a big winner amid the AI frenzy this year as its products empower AI systems including the large language model behind ChatGPT. The behemoth said in March it has modified some of flagship products including A100 and H100 for exports to China, including an alternative A800 chip, as the U.S. regulators last year banned it from selling its most advanced chips to China.

But even A800, the weakened version of Nivida’s cutting-edge A100 processor, could be categorized as the prohibited product when the White House rolled out new restrictions on China, according to a report more than three months ago. 

The Wall Street Journal reported late June that the U.S. government is considering new curbs on the exports of AI chips to China, including stopping the chip shipments made by U.S. companies to customers in China and other countries concerned without first obtaining a license. The move that the U.S. Commerce Department could announce is reportedly affecting all the American chipmakers such as Nvidia, AMD and Micron Technology. And the restrictions the department is reportedly mulling would even ban sales of A800 without a license.

Nvidia has kept warning against U.S. export controls on chips and other advanced technology products. The Chief Financial Officer Colette Kress warned restrictions on AI chip exports to China would lead to “a permanent loss of opportunities for the U.S. industry right after the Wall Street Journal report about looming further chip export curb. "Over the long term, restrictions prohibiting the sale of our datacenter graphic processing units to China, if implemented, would result in a permanent loss of opportunities for the U.S. industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results," said Kress, though seeing no immediate material impact. 

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