US mulls export caps on AI chips from Nvidia, AMD to some nations – report

The U.S. government officials have been in talks to cap sales of advanced AI chips from Nvidia (NASDAQ:NVDA) and other U.S. companies on a country-specific basis, Bloomberg News reported citing people with knowledge of the matter.

The move, which could potentially curb some countries’ AI capabilities, would set a cap on export licenses for certain nations in the interest of national security, the report added.

Officials are focused on Persian Gulf countries, which are showing growing demand for AI data centers and have large funds to support these efforts, the report noted.

The discussions are in initial phases and remain fluid, and that the idea has seen traction in recent weeks. The initiative would build on a new framework to ease the licensing requirements for AI chip shipments to data centers in regions such as the United Arab Emirates and Saudi Arabia, according to the report.

Last month, the Commerce Department officials revealed these regulations and said there are more rules coming, the report added.

A spokesperson for the White House National Security Council declined to provide any remarks to the news agency but pointed to a joint statement by the U.S. and the UAE on AI.

“The U.S. and the UAE look forward to deepening collaboration across AI and related technologies to propel their strategic partnership forward,” said the Sept. 23 press release.

Country-specific ceilings would tighten curbs that originally targeted China’s AI ambitions, as the Biden administration mulls security risks of AI development globally.

In 2022, the U.S. brought in curbs on export of advanced chips and related equipment to China from companies such as Nvidia (NVDA). The restrictions since then have continued to grow for American and other global companies, such as Advanced Micro Devices (AMD), Intel (INTC), and ASML (ASML), among others. The U.S. and its allies including the Netherlands, Germany, South Korea and Japan have all been tightening curbs on the Asian country’s access to advanced semiconductor technology.

The U.S. has already restricted AI chip shipments by chipmakers such as Nvidia and AMD to over 40 countries across the Middle East, Africa and Asia amid concerns that their products could be diverted to China, the report noted.

Officials have concerns on how the AI technology would be used by countries and how it could impact U.S. intelligence operations. “What are the risks not just on human rights grounds, but also in terms of the security and the counterintelligence risks to our personnel around the world,” said Maher Bitar, a National Security Council official at an event in June.

It is not known how AI chip making companies would react to more of the U.S. restrictions. In July, it was reported that Nvidia was in the process of making a version of its new flagship AI chips for the Chinese market which would adhere to the U.S. export rules.

Meanwhile, Chinese companies are working to develop their own AI chips, though they still lag behind their American counterparts. Huawei Technologies is one such company which has been trying to rival Nvidia’s AI chips in the Chinese market.