The US government's newly imposed export rules block $5 billion worth of advanced AI GPUs from China

NVIDIA GeForce RTX 3090 Ti
(Image credit: NVIDIA)

What you need to know

  • The US government is doubling down on AI safety and recently imposed new exportation rules and guidelines affecting the shipment of AI chips to China, Saudi Arabia, the United Arab Emirates, and Vietnam.
  • The government seeks to establish control over these shipments as it fears the components will be used for military advances.
  • Early implementation of the rules has deterred NVIDIA's plans to ship $5 billion worth of AI chips to China, forcing it to cancel orders from Alibaba, Baidu, and Byte Dance.
  • Chipmakers will now require an export license to ship AI chips to China, Saudi Arabia, the United Arab Emirates, and Vietnam.

In the recent past, we've seen the Biden-Harris administration develop a keen in AI chips, which has prompted the US government to order NVIDIA and AMD to stop shipping the components to China. The government fears that the chips might be used in the development of military ammunition. President Biden recently issued an Executive Order to address some AI privacy and safety concerns.

The new export rules have seemingly taken effect, deterring NVIDIA from shipping approximately $5 billion worth of AI chips to China, according to a spot by The Wall Street Journal. Consequently, this has forced the chipmaker to cancel its orders from Alibaba, Baidu, and Byte Dance. The company has since relocated the GPUs to other companies that remain unaffected by the new exportation rules.

When did the US government implement the new exportation rules?

Most companies impacted by the new exportation rules by the US government had anticipated that the implementation would take place in mid-November. However, this isn't the case, as the exportation rules were enforced last week.

NVIDIA had already struck a deal to ship GPUs worth around $5 billion to Alibaba, Baidu, and ByteDance early next year but decided to move the timeline up after it got wind of the new exportation rules from the US government. 

As we speak, the status of the shipment remains uncertain as the new rules are already in effect, which makes it harder for NVIDIA to execute the shipment. What's more, the newly implemented rules indicate that NVIDIA will now require an export license to ship its A100, A800, H100, H800, and more (often used for AI) to China, Saudi Arabia, the United Arab Emirates, and Vietnam, as spotted by Tom's Hardware

How will the new exportation restrictions affect China?

While the new rules make it extremely difficult for NVIDIA to sell its A800 and H800 AI and HPC GPUs in the Chinese market, the US government stresses that these measures aren't in place to cripple China's economy. Instead, they are in place to mitigate and establish control over its AI and military advances.

NVIDIA's business ventures continue to show great promise amid the newly imposed exportation rules, at least for the next few years, as the demand for its GPUs continues to rise

Do you think these newly imposed rules will help address AI safety concerns? Share your thoughts with us in the comments.

Kevin Okemwa

Kevin Okemwa is a seasoned tech journalist based in Nairobi, Kenya with lots of experience covering the latest trends and developments in the industry at Windows Central. With a passion for innovation and a keen eye for detail, he has written for leading publications such as OnMSFT, MakeUseOf, and Windows Report, providing insightful analysis and breaking news on everything revolving around the Microsoft ecosystem. You'll also catch him occasionally contributing at iMore about Apple and AI. While AFK and not busy following the ever-emerging trends in tech, you can find him exploring the world or listening to music.