US vs China: The Ongoing Battle over AI Chip Technology
FxNews – The US government is thinking about more ways to stop Chinese developers from getting US-made AI Chip Technology (semiconductor chips) through third parties. A Reuters report on October 13 said that the Biden administration is looking at a loophole that lets Chinese developers buy chips from Huaqiangbei electronics area in Shenzhen, a city in southern China.
The report says that new rules on AI chips will be released this month. These rules will apply restrictions that were only for top US companies like Nvidia and AMD to all companies making similar products.
Earlier this year, the US government asked big chip makers like Nvidia to limit exports of their high-level semiconductor chips to some Middle Eastern countries. But US regulators have not said they are blocking AI chip exports to the Middle East. Nvidia has warned that if it is excluded from China, it could hurt their long-term revenue. Most of Nvidia’s revenue comes from the US, China and Taiwan, with less than 14% coming from all other countries.
The Biden administration is also trying to find a way to stop Chinese parties from getting access to US cloud service providers like Amazon Web Services (AWS). But the report says that solutions for this problem are “less clear.”
In July, US officials started thinking about restrictions on access to cloud computing services like AWS by Chinese companies to protect the country’s advanced technology.
The US first put export controls on its most powerful semiconductor chip technology in October 2022. Since then, Washington has made these measures stricter and is still thinking about more ways to limit the computing power of chips available in the Chinese market.
China has also responded to these measures from the United States. In July, it said it would control exports of gallium and germanium, two main materials for making AI chips.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.