US ends sale of high-demand chips in China

High-profile Chinese universities and state-run research institutes have been relying on U.S. computing chips, whose export to China have now been restricted by Washington, to power their artificial intelligence (AI) technology.

Last week, U.S. chip designer Nvidia said it was told by U.S. government officials to stop exporting its A100 and H100 chips to China, while U.S. manufacturer Advanced Micro Devices (AMD) also said that due to new license requirements, it can no longer export its advanced AI chip MI250 to China.

Amidst rising tensions over Taiwan, the development is a major escalation of a U.S. campaign to curb China’s technological abilities.

In a Reuters review of more than one dozen publicly available government tenders over the past two years, some of China’s most strategically important research institutes are said to require Nvidia’s signature A100 chips.

One of the tenders showed that in October, Tsinghua University, China’s highest-ranked higher education institution internationally, spent over $400,000 on two Nvidia AI supercomputers, each powered by four A100 chips.

In the same month, the Institute of Computing Technology, part of the Chinese Academy of Sciences, spent some $250,000 on A100 chips.

The tenders also showed that minor institutes and universities, supported by municipal and provincial governments, such as in Shandong, Henan and Chongqing, also bought A100 chips.

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Meanwhile, Nvidia reported that this quarter it had sales of the now banned chips in China worth $400 million, which could be lost if its customers decide to buy alternative Nvidia products, adding that it is planning to apply for exemptions to the new U.S. rules.

The lack of such chips will likely hamper China’s capacity to effectively carry out tasks that require advanced computing, such as image and speech recognition, which are common in consumer applications such as smartphones, as well as in military equipment, such as
satellites used for intelligence-gathering purposes.