U.S. officials have told AMD and Nvidia to stop exporting their top artificial intelligence chip to China, Reuters news report said.
Advanced Micro Devices (AMD) said new license requirements prevent shipment of its MI250 chips to China. But AMD believes its MI100 chips are not affected by the new requirement. The company said it does not believe the new rules will have a material impact on its business.

Chip designer Nvidia will stop exporting two computing chips for artificial intelligence  work to China, a move that could cripple Chinese firms’ ability to carry out advanced work like image recognition. Nvidia expects to generate $400 million in sales from this business during the quarter.

Nvidia said it booked $400 million in sales of the affected chips this quarter to China that could be lost if Chinese firms decide not to buy alternative Nvidia products. Nvidia said it plans to apply for exemptions to the rule but has no assurances that U.S. officials will grant them.

Nvidia said the ban, which affects its A100 and H100 chips designed to speed up machine learning tasks, could interfere with completion of developing the H100, the flagship chip Nvidia announced this year.

AMD said it received new license requirements that will stop its MI250 artificial intelligence chips from being exported to China but it believes its MI100 chips will not be affected.

The announcement signals a major escalation of the U.S. crackdown on China’s technological capabilities as tensions bubble over the fate of Taiwan, where chips for Nvidia and almost every other major chip firm are manufactured.

Without chips from companies like Nvidia and its rival AMD, Chinese organizations will be unable to cost-effectively carry out advanced computing used for image and speech recognition, among many other tasks.

Stacy Rasgon, a financial analyst with Bernstein, said the disclosure signaled that about 10 percent of Nvidia’s data center sales, which investors have closely monitored in recent years, were coming from China and that the hit to sales was likely manageable for Nvidia.