Gina Raimondo, US Secretary of Commerce, from left, Antony Blinken, US Secretary of State, and Katherine Tai, US Trade Representative, during a discussion at the US-EU Trade and Technology Council meeting in College Park, Maryland, US, on Monday , December 5, 2022.
Ting Shen | Bloomberg | Getty Images
Shares of Nvidia dipped 3.7% and Advanced micro devices fell about 3% in premarket trading after that The Wall Street Journal reported that the federal government is considering new restrictions on the export of advanced chips used in artificial intelligence computers to China.
The export restrictions being considered would be imposed by the Department of Commerce and would come after the US government had already limited the computing power of chips made for Chinese use. Nvidia and AMD were affected by the earlier limitation.
Other chipmakers also fell on the news in premarket trading. miracle submerged more than 2%, and Broadcom And Qualcomm both fell about 1%.
Nvidia responded to the earlier restrictions by building a lower-spec chip for the Chinese market. But under the new controls being considered, even that chip, the A800, would be exported without a license, the Journal reported.
The restrictions would also apply to companies offering cloud-based computing solutions, the Journal reported, which have been used by some companies to evade export controls.
Competition between the US and China for hardware and software technology has increased in recent years. Cybersecurity threats from Chinese state-backed threats have been identified by top US officials as one of the top national security threats facing the United States. Sensitive technology has reportedly been stolen from US companies for the benefit of Chinese domestic competitors, either through outright industrial espionage or through joint venture projects that require US companies to partner with Chinese companies to do business in China.
Against this backdrop, tighter controls on chip exports are likely to exacerbate trade tensions between the two countries. US officials have tried to mitigate the potential fallout, but tightening export controls would likely jeopardize those efforts. Gina Raimondo, who as Commerce Secretary would lead the enforcement of any export controls, met with her Chinese counterpart in Beijing earlier this year.
Nvidia declined to comment, as did the Bureau of Industry and Security, the Commerce Department’s export control unit. AMD did not immediately respond to a request for comment.