US Is Slowing AI Chip Exports to Middle East by Nvidia, AMD – Yahoo Canada Finance
(Bloomberg) — US officials have slowed the issuing of licenses to chipmakers such as Nvidia Corp. and Advanced Micro Devices Inc. for large-scale AI accelerator shipments to the Middle East, according to people familiar with the matter, while officials conduct a national security review of AI development in the region.
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It’s unclear how long the review will take, nor is there a concrete definition of what constitutes a large shipment, said the people, who asked not to be identified because the discussions are private. Officials are particularly focused on high-volume sales, the people said, as countries including the United Arab Emirates and Saudi Arabia look to import massive quantities of the chips used in AI data centers.
AI accelerators — a category pioneered by Nvidia — help data centers process the flood of information needed to develop artificial intelligence chatbots and other tools. They’ve become essential equipment for companies and governments seeking to build an AI infrastructure.
In October, the Commerce Department added much of the Middle East to chip export restrictions that originally focused on China and a handful of other foreign adversaries. That meant companies needed a special US government license to ship cutting-edge semiconductors and chipmaking tools to countries such as Saudi Arabia and the UAE.
US officials have delayed or not responded to license applications submitted under that rule in the past several weeks, some of the people said. That includes attempts to sell to customers in the UAE, Saudi Arabia and Qatar, according to one of the people. In addition to Nvidia and AMD, Intel Corp. and startup Cerebras Systems Inc. also make accelerator chips. The four companies declined to comment.
The goal is to give Washington time to develop a comprehensive strategy around how the advanced chips will be deployed overseas, according to the people. That includes negotiating who manages and secures the facilities used to train AI models, some of the people said.
Shares of Nvidia slipped to a low for the day after Bloomberg reported on the license reviews. At the close in New York, the stock was down 3.8% to $1,105. AMD, meanwhile, pared earlier gains. It was up less than 1% to $166.75.
In a statement, the Commerce Department said its highest priority was “protecting national security.”
“With regards to the most cutting edge technologies, we conduct extensive due diligence through an interagency process, thoroughly reviewing license applications from applicants who intend to ship these advanced technologies around the world,” a representative for the department said. “As always, we remain committed to working with our partners in the Middle East and around the world to safeguard our technological ecosystem.”
Thea Kendler, who leads export administration at the Commerce Department, visited the UAE, Saudi Arabia, Qatar and Kuwait earlier this month as part of those ongoing discussions. In the UAE, she indicated that there was progress in collaboration on semiconductor export controls, another person familiar with the matter said.
Part of the concern is that Chinese companies, which are largely cut off from cutting-edge American technology themselves, could access those chips through data centers in the Middle East. The Biden administration has been waging a broader campaign to keep advanced semiconductors and manufacturing equipment out of China’s hands, for fear that the technology will be used to bolster its military.
The UAE and Saudi Arabia have been jockeying for regional leadership in AI, aiming to reduce their economies’ dependence on oil. Both countries see the US as a key partner in that effort, and top officials and companies have said they’ll fulfill US requests to keep Chinese supply chains separate — or divest from Chinese technology entirely.
Meanwhile, Saudi Arabia just forged a deal with China’s Lenovo Group Ltd. that involves the computer maker building a research and development center in Riyadh.
Read More: Lenovo Forges Saudi Pact With $2 Billion Convertibles Issue
The ability to secure export licenses is a major part of negotiations surrounding Microsoft Corp.’s $1.5 billion investment in Abu Dhabi AI firm G42 — a partnership that followed months of talks with US officials.
–With assistance from Nick Wadhams.
(Updates shares in seventh paragraph.)
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