According to sources, nearly all major tech companies operating public clouds or artificial intelligence training modules in China are likely to be impacted by a US decision banning exports of some AI components to that nation.
Chipmaker Nvidia claimed that American officials ordered it to stop supplying two of the best processing chips to China for use in AI projects.
The shipment of Advanced Micro Devices (AMD) MI250 advanced AI processors to China has been prohibited by new license requirements, according to AMD.
A representative for the Chinese Commerce Ministry, Shu Jueting, stated on Thursday that Beijing opposes the regulations because they threaten to disrupt global supply chains and violate the rights of Chinese businesses.
According to Jay Goldberg, CEO of D2D Advisory, a finance and strategy consulting company, “We’re going from barring specific U.S. corporations from supplying to a given company, as was the case with Huawei, to banning certain U.S. products from selling to China generally.”
The worst-case scenario, according to analysts at Jefferies, would be if Washington expanded the embargo to prevent contract chipmakers like Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics from producing semiconductors for Chinese chip designers.
We’re not there yet, so before taking drastic action, the United States will probably assess how well each gradual step works.
According to market observers, the most recent prohibition is likely to affect Chinese tech firms such as Alibaba, Tencent, Baidu, and Huawei Technologies.
Affected companies might employ several low-end chips to mimic the processing capacity of the outlawed, high-end chips, or rely on cloud services from Alphabet’s Google or Amazon.com’s AWS to develop AI software that could replicate the processing power of the banned high-end chips, according to Jefferies.
The AI and machine learning applications that the Nvidia and AMD chips targeted by Washington are used, primarily for creating training modules for tasks like natural language processing
The military might find these components helpful for constructing weapons and simulating bombs.
Few Chinese companies, according to Goldberg at D2D, could produce AMD and Nvidia replacement chips rapidly, and the limits would probably encourage greater funding for domestic chip startups to close the gap with American companies.
