Advanced Micro Devices Inc. encountered a hurdle from the US government in its attempt to sell an artificial intelligence chip tailored for the Chinese market. Sources familiar with the matter revealed that this setback is part of Washington’s stringent measures against exporting advanced technologies to China.
AMD aimed to secure approval from the Commerce Department to market the AI processor to Chinese clients. The chip, designed to comply with US export restrictions, has lower performance compared to AMD’s offerings outside of China.
However, US officials informed AMD that the chip’s capabilities still exceeded the permitted threshold, mandating the company to acquire a license from the Commerce Department’s Bureau of Industry and Security for its sale. AMD refrained from immediate comments on the matter, while the Bureau of Industry and Security declined to provide a statement. It remains unclear whether AMD will proceed with applying for a license.
The United States has been actively restricting Chinese access to state-of-the-art semiconductors capable of developing AI models, along with the manufacturing tools for these chips. This restrictive stance stems from concerns that Beijing could leverage these technologies to gain military advantages. President Joe Biden’s administration initially introduced export controls in 2022 and reinforced them in October of the same year, expanding the scope of restricted technologies and tightening regulations on sales to intermediary nations that could circumvent the ban.
The tightened controls had an impact on the sale of a processor specifically designed for China by leading AI chipmaker Nvidia Corp., in accordance with the initial 2022 version of the export rules. Nvidia subsequently developed new customized, less-powerful products for the Chinese market to comply with the 2023 restrictions. Commerce Secretary Gina Raimondo has expressed interest in understanding the specifics of these newly developed components.
Both Nvidia and AMD were barred from selling their most powerful AI chips to China under the 2022 US ban, prompting them to seek alternative solutions. Nvidia promptly introduced a modified model with reduced performance, while AMD’s efforts to develop a new AI processor for the Chinese market have not been publicly disclosed.
AMD had a smaller presence in the Chinese AI chip industry compared to Nvidia, which held a significant market share prior to the ban. Although AMD initially stated that it did not anticipate significant impacts from the rules, it has since become more assertive in pursuing the AI chip market. In December, AMD launched a new MI300 lineup, including a China-tailored product referred to as the MI309.
The specific Chinese customer interested in purchasing AMD’s AI chips remains undisclosed, a factor that could influence the company’s ability to secure a license if it chooses to proceed with the sale.
Major Chinese tech firms like Tencent Holdings Ltd. and Baidu Inc. have stated that they have stockpiled sufficient powerful chips from Nvidia, which are now subject to US controls, to enhance their chatbots’ capabilities for the next one or two years.
Meanwhile, Huawei Technologies Co., based in Shenzhen, is actively developing its own AI semiconductors and chipmaking capabilities. This initiative aims to enable Chinese companies to fill the gap created by the US ban in the long term.