The US government has refuted claims that it has banned the sales of artificial intelligence (AI) chips from technology giants Nvidia and AMD to Middle Eastern countries. Earlier this week, reports emerged stating that the US government had imposed restrictions on the exports of Nvidia’s A100 and H100 products, requiring the companies to obtain licenses in order to sell them in certain Middle Eastern nations. However, a spokesperson from the US Department of Commerce has denied that there is an outright ban on chip sales.
In a recent regulatory filing, Nvidia disclosed that it would need to apply for a special license starting in the second quarter of 2024 to sell subsets of its A100 and H100 chip products in some unidentified Middle Eastern countries. Similarly, AMD also received a letter from the Commerce Department imposing similar requirements. While the details of the licensing requirements and the reasons for their implementation remain unclear, it is important to note that the A100 and H100 chips are known for facilitating image and speech recognition capabilities. The A100 chip is designed to enhance AI workloads by performing matrix operations at higher speeds, while the H100 chip allows users to easily and quickly scale up computing performance, making it suitable for large-scale machine learning and deep learning tasks.
It is worth mentioning that these chips can also be utilized for military-grade hacking operations and cyber espionage on a significant scale. This is one reason why export licensing rules are sometimes used to restrict market access. For instance, shipments of AI chips to China are already restricted due to stringent export license requirements. This measure aims to limit China’s access to technology that could potentially enhance its kinetic and cyber military operations. Some industry experts consider these license requirements to be an effective blockade that hampers conducting business in the region.
Nvidia acknowledged the potential long-term negative impact on their results and competitive position due to further changes in the US government’s export controls, as stated in their regulatory filing. Additionally, last September, AMD revealed that it had received new license requirements, leading to a complete halt in exports of its MI250 chips to China.
Although the US government has denied outright blocking chip sales to Middle Eastern nations, it is important to consider the precedent set by export licensing rules. The restrictions on sales to China highlight the use of such measures to prioritize national security and limit access to advanced technology. While it remains uncertain what specific licensing requirements will be imposed on Middle Eastern countries and the rationale behind them, it is worth noting that certain states in the region, such as Iran, are renowned for their hacking operations.
In conclusion, despite initial reports of a ban on AI chip sales to the Middle East, the US government has denied such claims. However, the requirement for licensing to sell specific chip subsets indicates the potential for limitations on market access. With the significance of these chips in military-grade operations and the complex landscape of international relations, export controls and licensing requirements continue to play a crucial role in international technology trade.