Biden to cut China off from more Nvidia chips
STORY: The Biden Administration said on Tuesday it plans to halt shipments to China of advanced artificial intelligence chips designed by Nvidia and others.
The move is aimed at stopping Beijing from getting cutting-edge U.S. technologies to strengthen its military.
Commerce Secretary Gina Raimondo said the new measures would close loopholes in regulations released last year and will probably be updated at least annually.
She stressed the policy change was not designed to hurt China economically.
The rules will exempt most consumer chips used in laptops, smartphones and gaming, though some will be subject to licensing and notification requirements by U.S. officials.
In a statement, top AI chip designer Nvidia said it complies with the current regulations and does not expect "a near-term meaningful impact" to its financial results from the new rules.
Investors, however, though appeared concerned as the stock fell as much as 7-percent in early trading before reducing those losses. Other chip stocks suffered smaller declines.
Liz Miller, Founder and President of Summit Place Financial Advisors, said she thinks the move won’t have a long term impact on the sector.
"In the chip market, we're seeing a new wave come through so strongly from computing demands from AI that, while I think these new rules may be a bit of a short-term stumbling block and may even be just political negotiating, I think the company fundamentals will remain strong as we look forward."
The Chinese Embassy in Washington did not immediately respond to requests for comment on the new measures which also apply to Iran, Russia and other countries.
