By Akash Sriram
(Reuters) -Nvidia Corp said on Thursday the U.S. government has allowed exports needed to complete the development of its flagship artificial intelligence chip, a day after it disclosed that Washington had restricted shipments of two chips to China.
The curbs on exports of Nvidia’s H100 chips and A100 chips – designed to speed up machine learning tasks – signaled an escalation of the U.S. crackdown on China’s technological capabilities as tensions rise over the fate of chip hub Taiwan.
Nvidia had said on Wednesday the move could hurt its business in China and interfere with the development of the H100 chip, which is expected to ship later this year.
Shares of the chip designer fell 7%, dragging the Philadelphia SE Semiconductor Index down by over 3%.
In its statement on Thursday, Nvidia said U.S. officials have authorized it to perform exports needed to provide support for U.S. customers of A100 through March 1, 2023.
The company has also been allowed to fulfill orders of the chips via its Hong Kong facility through Sept. 1, 2023. (https://bit.ly/3Q5YfhR)
Chinese customers are still required to obtain licenses from the U.S. government for the technology, a spokesperson for Nvidia said.
“On the surface, it looks like the U.S. government is looking to refrain from sales of next generation advanced chips, 7 nanometers and below, specifically for military end use in China,” said CFRA Research analyst Angelo Zino.
Experts said the curbs are likely to hit almost any major tech company running public clouds or advanced artificial intelligence training modules in the Asian country.
Rival Advanced Micro Devices Inc, whose shares were down about 5%, was also asked on Wednesday to stop AI chip exports to China. The company did not respond to a request for comment on whether it received a similar authorization.
(Reporting by Akash Sriram, Yuvraj Malik and Tiyashi Datta in Bengaluru; Editing by Aditya Soni)