The Biden administration, through Commerce Secretary Gina Raimondo, is engaging in intricate discussions with Nvidia Corp about the sales of artificial intelligence chips to China. While the U.S. allows the sale of AI chips for commercial purposes, it firmly restricts the export of the most advanced semiconductors to Chinese firms.
The balancing act: Commerce vs control
The U.S. aims to maintain a delicate balance between allowing Nvidia to engage in commercial activities and preventing the transfer of technology that could give China a significant advantage in AI. Raimondo has warned chip companies against circumventing export controls by designing chips that just fall below the regulatory cutline, emphasizing that such attempts will be promptly controlled​​.
Nvidia, headquartered in Santa Clara, California, is currently developing chips specific to the Chinese market that comply with the stricter guidelines announced by the U.S. Commerce Department. The company has expressed its commitment to working with the U.S. government and ensuring that its new chips for China adhere to export restrictions​​.
China criticizes yet US is vigilant on tech export
Raimondo, in a recent interview, emphasized the delicate nature of these negotiations. “What we cannot allow them to ship is the most sophisticated, highest-processing power AI chips, which would enable China to train their frontier models,” she stated. This stance highlights the U.S.’s concern about maintaining a technological edge, particularly in fields with significant national security implications​​.
Nvidia, led by CEO Jensen Huang, has shown a proactive approach in adhering to U.S. regulations. “We don’t want to break the rules. Tell us the rules, we’ll work with you,” Huang was quoted, signaling the company’s commitment to compliance. Nvidia declined to comment further, but Huang previously mentioned that the company is working closely with the U.S. government to ensure that new chips for the Chinese market are compliant with export curbs​​.
The U.S. has tightened export controls, prompting Nvidia to develop China-specific chips that comply with these new regulations. This move is a direct response to the U.S.’s stringent guidelines, with Raimondo warning chip companies against attempts to circumvent these controls. “If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” she declared at a recent forum in California, underscoring the seriousness of the U.S. stance​​.
Chinese Foreign Ministry spokeswoman Mao Ning criticized the U.S. actions, arguing that they “undermine the legitimate rights and interests of Chinese companies and will not be conducive to the stability of the global and industrial supply chains.” This statement reflects the broader geopolitical tensions and the impact of U.S. policies on international trade relations​​.
The Commerce Department, while not commenting directly on Nvidia’s new chips, reiterated its commitment to continually updating rules to respond to evolving threats. This approach indicates a dynamic and responsive U.S. strategy in dealing with technological advancements and their potential implications for national security​​.
