March 27, 2024
US Department of Commerce Denies Blocking Chip Sales to the Middle East
Policy & Regulation

US Department of Commerce Denies Blocking Chip Sales to the Middle East

The Biden administration has “not blocked chip sales to the Middle East,” the US Department of Commerce stated on August 31, according to a Reuters story.

The U.S. government had raised the conditions for export licenses for artificial intelligence (AI) chips, as revealed in an Nvidia study.

Regulators also sent a letter to Advanced Micro Devices (AMD), a company that directly competes with Nvidia.

Regarding whether particular American businesses were subject to the regulations, the Department of Commerce made no comments. Nvidia and AMD would have to seek permits under the new regulations before offering their flagship chips to “some Middle Eastern countries,” according to the application.

Neither of the businesses has acknowledged if it has filed for the aforementioned licenses or whether there has been input on licensing in that area.

In its quarterly report, Nvidia cautioned regulators that being “effectively omitted from any or all of China” might potentially “harm” the company’s long-term performance.

The Biden administration implemented the first export restrictions in October 2022 in an effort to prevent China from creating advanced artificial intelligence (AI) systems that use potent semiconductors produced by American firms.

In a statement released on June 29, officials in Washington stated they might consider strengthening the aforementioned limits even more, which would further restrict the computational capacity of chips offered in the Chinese market.

Other regulators from across the world have been closely monitoring the actions taken by the American government. An agreement to limit shipments of machinery for semiconductor production to China was reached with the Netherlands and Japan not long after the United States’ original prohibitions went into force.

Officials in the UK, France, and Germany have all publicly stated that they are thinking of reviewing Chinese foreign direct investment in important fields like AI.

In response, China declared that it would regulate the export of goods containing the major raw ingredients required to make AI chips: germanium and gallium.

Image: Freepik

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