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August 31, 2023

US Restricts Export of Nvidia and AMD AI Chips to Select Middle East Nations

In Brief

Export controls imposed by US authorities often stem from concerns related to national security. However, the exact risk associated with exports to the Middle East remains unclear.

At present, the US Commerce Department is responsible for overseeing new licensing prerequisites for exports.

The United States has tightened control over exporting sophisticated artificial intelligence (AI) chips manufactured by Nvidia and Advanced Micro Devices (AMD). The scope of the restrictions now extends beyond China, encompassing several Middle East countries.

Export controls imposed by US authorities often stem from concerns related to national security. A parallel development in the previous year signaled an escalation of the US crackdown on China’s technological prowess. However, the exact risk associated with exports to the Middle East remains unclear.

At present, the US Commerce Department is responsible for overseeing new licensing prerequisites for exports. 

Nvidia recently disclosed in a regulatory filing that these restrictions, impacting its A100 and H100 chips designed to enhance machine-learning capabilities, would not have an “immediate material impact” on its financial outcomes.

In a statement, Nvidia assured, “The new licensing requirement doesn’t significantly impact our revenue. We are collaborating with the US government to address this matter.”

According to Reuters, AMD also received a communique outlining similar restrictions, stating that the measure would not substantially affect its revenue.

Last September, AMD announced revised licensing requirements that effectively halted the export of MI250 artificial intelligence chips to China. Following this, Nvidia, AMD and Intel disclosed their intentions to produce AI chips with reduced potency, eligible for export to the Chinese market.

The Depth of Chip Restriction Impact on the Middle East

Nvidia did not specify the Middle East countries impacted by the new restrictions.

The company primarily garners $13.5 billion in sales from the United States, China, and Taiwan for its fiscal quarter ending July 30. Sales from other countries collectively constitute approximately 13.9% of the total revenue. Nvidia abstained from disclosing revenue specifics from the Middle East.

“During the second quarter of fiscal year 2024, the US government informed us of an additional licensing requirement for a subset of A100 and H100 products destined to certain customers and other regions, including some countries in the Middle East,” said Nvidia, in a statement. 

Last year’s announcements coincided with growing tensions surrounding Taiwan, a critical hub for chip manufacturing; serving Nvidia and most major chip manufacturers.

In October 2022, the Biden administration escalated actions by unveiling extensive export controls. Among these measures was a provision to sever China’s access to distinct semiconductor chips produced worldwide using US equipment. This maneuver significantly expanded Washington’s influence in its pursuits to hinder Beijing’s technological and military advancements.

Japan and the Netherlands subsequently introduced analogous regulations earlier this year.

The rigorous control over American AI chips, as provided by companies like Nvidia and AMD, is expected to obstruct Chinese entities from cost-effectively executing advanced computing tasks, encompassing image and speech recognition, among diverse applications.

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About The Author

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

More articles
Victor Dey
Victor Dey

Victor is a Managing Tech Editor/Writer at Metaverse Post and covers artificial intelligence, crypto, data science, metaverse and cybersecurity within the enterprise realm. He boasts half a decade of media and AI experience working at well-known media outlets such as VentureBeat, DatatechVibe and Analytics India Magazine. Being a Media Mentor at prestigious universities including the Oxford and USC and with a Master's degree in data science and analytics, Victor is deeply committed to staying abreast of emerging trends. He offers readers the latest and most insightful narratives from the Tech and Web3 landscape.

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