Chip designer Nvidia has said that US officials have ordered it to stop exporting two top computing chips required for artificial intelligence (AI) work to China.
The move could cripple the ability of Chinese firms to carry out advanced work like image recognition and hamper Nvidia’s expectations to generate $400 million in sales this quarter. Nvidia shares fell about 4% after hours.
The company said that the ban, which affects its H100 and A100 chips designed to speed up machine learning tasks, could interfere with the completion of development of the H100, the flagship chip Nvidia announced this year. AMD shares were down 2% in after-hours trading.
AMD had received new license requirements to stop its MI250 artificial intelligence chips from being exported to China, but it believes its MI100 chips will not be affected. AMD said it does not believe the new rules will negatively impact its business.
Nvidia said US officials told it the new rule would address the risk that the covered products may be used in, or diverted to, military end use or military end user in China.
The announcement signals a significant escalation of the US 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 American chips from companies like Nvidia and its rival Advanced Micro Devices, Chinese organizations will be unable to cost-effectively carry out the kind of advanced computing used for image and speech recognition, among many other tasks.