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New U.S. restrictions on sales of Nvidia AI chips to China accelerate sales

The logo of technology company Nvidia is seen at its headquarters in Santa Clara, California on February 11, 2015. REUTERS/Robert Galbraith/File Photo

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SEPTEMBER 1 (Reuters) – New restrictions on the export of cutting-edge chips to China from NVIDIA Corporation (NVDA.O) show a tightening U.S. crackdown on Beijing’s tech prowess, with investors already pushing the industry. We are wary of concerns about a slump in

Nvidia shares fell 11% to $133.46 on Thursday, wiping out more than $40 billion in market value and sending the Philadelphia SE Semiconductor Index (.SOX) down more than 4%.

A US move to restrict exports of two of Nvidia’s artificial intelligence computing chips, the H100 and A100, to China could hurt the company’s business in key markets, according to Wednesday’s filing.read more

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Washington’s action comes at a time of heightened tensions over access to advanced chip technology and the future of Taiwan, where Nvidia and nearly every other major semiconductor company sources chips.

CFRA Research analyst Angelo Zino said: “On the surface, the U.S. government appears to be holding off on selling next-generation advanced chips below 7 nanometers, especially for military applications in China. looks like

Rival Advanced Micro Devices Inc (AMD.O) was also asked on Wednesday to stop exporting AI chips to China.

Nvidia and AMD chips targeted by Washington are used to build training modules for AI and machine learning applications, especially tasks such as natural language processing.

These modules may also be useful to the military in modeling bomb simulations and weapon design.

Many Chinese tech companies likely to be affected by restrictions, including Alibaba Group Holding (9988.HK), Tencent Holdings (0700.HK), Baidu and Huawei Technologies said market officials. [RIC:RIC:HWT.UL].

Nvidia also said on Wednesday that the move could hamper development of its flagship H100 chip, which is expected to ship later this year.

On Thursday, the US government announced that it had granted the exports and technology transfers necessary to complete the development of the H100 chip. U.S. authorities have also allowed the company to make the necessary exports to provide support to A100’s U.S. customers until March 1, 2023.

The company is also allowed to fulfill chip orders through its Hong Kong facility until September 1, 2023. (https://bit.ly/3Q5YfhR)

Chinese customers will still need to license the technology from the US government, according to an Nvidia spokesperson.

AMD did not respond to a request for comment on whether it received similar approval.

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Reporting by Akash Sriram, Yuvraj Malik, and Tiyashi Datta of Bengaluru; additional reporting by Noel Randewich; authoring by Ankur Banerjee.Edited by Aditya Soni

Our Standards: Thomson Reuters Trust Principles.

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