The escalating U.S.-China semiconductor war is causing growing concerns, as informed sources have disclosed to Bloomberg that the United States has slowed down the issuance of licenses for the export of artificial intelligence (AI) accelerators to American chip manufacturers such as NVIDIA and AMD. At the same time, U.S. officials are conducting national security reviews on the development of AI in the Middle East. Washington is worried that the Middle East could potentially become a channel for the Chinese Communist Party (CCP) to acquire American AI chips.
According to the Bloomberg report, it remains unclear how long the review process will take, and there is no specific definition of what constitutes “large-scale shipments.” Officials are particularly focused on bulk sales, as countries like the UAE and Saudi Arabia are looking to import a significant amount of chips for AI data centers.
AI accelerators, a category pioneered by NVIDIA, assist data centers in processing the vast amount of information needed to develop AI chatbots and other tools. They have become essential equipment for companies and governments seeking to establish AI infrastructure.
Due to U.S. export controls, many channels through which Chinese companies could obtain advanced American chip technology have been cut off. At the end of March this year, the U.S. government once again revised regulations aimed at preventing the CCP from obtaining American AI chips and chipmaking tools. These rules were initially issued in the previous years and in October last year, with each revision appearing to be more stringent than the previous restrictions. The previous restrictions had a 30-day period between issuance and implementation, while the new rules this year only had a 6-day gap.
Bloomberg reports that current U.S. concerns partly focus on the fact that Chinese companies could still access these technologies through data centers in the Middle East. The Biden administration has been spearheading a broader campaign to prevent advanced semiconductors and manufacturing equipment from falling into the hands of the CCP, aiming to prevent these technologies from being used by the CCP to enhance military capabilities.
In October last year, the U.S. Department of Commerce expanded export restrictions on most of the Middle Eastern regions, requiring companies to obtain special licenses from the U.S. government to ship advanced semiconductors and chipmaking tools to countries like Saudi Arabia and the UAE. These restrictions were originally targeted at the CCP and some other foreign adversaries.
Several informed sources told Bloomberg that in recent weeks, U.S. officials have been delaying or not responding to license applications. Apart from NVIDIA and AMD, Intel Corporation and the startup company “Cerebras Systems Inc.” also produce accelerator chips. All four companies declined to comment.
Sources indicate that this move aims to give Washington time to devise a comprehensive strategy on deploying advanced chips overseas. Some insiders suggest that this includes negotiating who will manage and protect facilities used for training AI models.
The U.S. Department of Commerce stated in a release that its primary mission is to “protect national security.” The department will conduct thorough reviews of license applications intending to export these advanced technologies around the world.
As part of ongoing discussions, Thea Kendler, the head of export controls at the U.S. Department of Commerce, visited the UAE, Saudi Arabia, Qatar, and Kuwait earlier this month.
The U.S. is also actively engaging with European and Asian allies to restrict the export of advanced chips and chipmaking equipment to China, a move that has drawn criticism from the Chinese authorities.