Biden administration poised to expand China AI chip sanctions- Wired

Investing.com– The Biden administration is expected to unveil a comprehensive set of export restrictions aimed at further limiting China’s ability to develop advanced artificial intelligence (AI), Wired reported on Wednesday.

These new export controls, which could be announced as early as Monday, are anticipated to target Chinese semiconductor production, including companies linked to tech giant Huawei.

The proposed measures could include adding around 200 Chinese firms to the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) entity list. Firms on this list require special licenses to procure U.S. software or products, significantly restricting their access to critical technologies.

Among the focus areas are high-bandwidth memory (HBM) chips, essential components for advanced GPUs and AI chips. Restrictions are expected to affect the latest HBM3 and potentially curtail access to HBM2, a slightly older but still vital technology, 

Bloomberg had earlier reported that the Biden administration was considering clamping down on China’s access to HBM chips.

The Biden administration was set to unveil new export restrictions on China as soon as next week, the U.S. Chamber of Commerce told members in an email, Reuters reported last week.

These efforts align with ongoing U.S. strategies to curb China’s technological advancements. Measures similar to the anticipated restrictions began during the Trump administration, including adding AI startups to the BIS list and blocking Huawei’s access to U.S. technology. The Biden administration tightened these controls further in 2022 and 2023, targeting advanced GPUs and closing loopholes that had allowed limited access to restricted technologies.

The potential sanctions are expected to intensify challenges for China’s AI sector, which relies heavily on advanced semiconductors to train large AI models. The targeted restrictions could disrupt firms like Huawei, which recently sent its Ascend AI training chips to customers, including ByteDance and Baidu (NASDAQ:), according to a report from The South China Morning Post. Despite past sanctions, Huawei has made notable progress, with reports suggesting it is ramping up domestic alternatives through partnerships with Chinese chipmaker SMIC.

The semiconductor industry, a critical component of global trade, could see ripple effects. U.S. chipmakers like NVIDIA Corporation (NASDAQ:), a leading supplier of high-performance GPUs, may experience reduced demand from Chinese firms, while Chinese tech companies might pivot further toward indigenous technologies or alternative international suppliers.

China has strongly opposed the anticipated measures, accusing the U.S. of using national security as a pretext to suppress its technological development. Meanwhile, the U.S. Chamber of Commerce has warned members of the impending controls, suggesting an extended timeline for their rollout, the reports stated.